HOUSE OF COMMONS, Friday, July 25.

He [Mr B. Cochrane] wished to know whether or not Captain Sherard Osborn had been appointed to a post under the Chinese Government - a most extraordinary proceeding altogether - at a salary guaranteed by our Government of 3,500 l. a year. Here, on one hand, was the admiral in command on the India station, the representative of the nation, who had 2,300 l. a year; and there, on the other, was Captain Sherard Osborn appointed to a post under the Chinese Government at a guaranteed salary of 3,500 l. (Hear, hear.)

Lord C. PAGET thought it very inadvisable that he should travel out of the immediate view of the motion of his hon. and gallant friend the member for Portsmouth, but it might be as well that he should give an answer to the statement of the hon. Member for Honiton with regard to Captain Sherard Osborn. There seemed to be some great misunderstanding on the part of the hon. gentleman that Captain Osborn was going to serve under the Chinese Government, being guaranteed 3,500 l. per annum. All he could say was that Her Majesty's Government knew nothing about it. Captain Sherard Osborn had applied to the Admiralty to be allowed to serve under the Chinese Government mainly "with a view to the suppression of piracy in the China seas." (Hear, hear.) He had leave given him to serve in China under that Government, but the Admiralty did not recognize any guarantee of terms whatever on the part of the Chinese Government. They had done what they did in former instances; Sir Baldwin Walker in the same way received permission, to serve the Turkish Government; Sir Adolphus Slade had a similar permission; the gallant and distinguished officer the member for Westminster in the same way served the Government of Spain. It was the constant practice of the Admiralty to permit distinguished officers to serve under foreign Governments. Such service involved no claim on the public of this country, either as regards pay for the officer himself, or any serving under him…

Sir J. HAY thought it of great importance that the House should understand on what grounds leave had been given to Captain Sherard Osborn to serve under the Chinese Government. Was it intended that officers should be permitted to proceed to China and take service with this or that party of rebels or with the established and recognised Government for the purpose of supporting an effete dynasty and decaying Power? If that was so they would be entering upon a labour which at such a distance from this country they would find it excessively difficult to persevere in. This was not the case of a recognised officer belonging to this Government acting against pirates in the China seas with the permission of the Chinese Government. Surely it could not be the intention of the Government that an unauthorised individual on the half-pay of the British navy, with permission to serve under a foreign Government, should, if successful in his operations against the pirates take all the credit of that success, and if unsuccessful should be allowed to fall back on the British naval Commander-in-Chief and involve this country in a war without the consent of the authorities in any way whatever. The services of Captain Sherard Osborn, he presumed, were to be performed afloat; was he to embark in the lorcha Arrow, in a Chinese junk, or in a vessel built in this country and fitted out by the Chinese Government?

Mr. KINNAIRD regarded the employment of Captain Sherard Osborn by the Chinese Government with great satisfaction. It would strengthen the hands of that Government, and he hoped an officer of so much experience would be successful in patting down the piracy which was rampant in those seas.

Lord LOVAINE was understood to ask for information relative to Captain Sherard Osborn's pay and reward for his services to the Chinese Government.

Colonel SYKES had no doubt that piracy was rampant in the China seas. The blue-books presented to the House with reference to transactions in China ought to be more explanatory and in detail than they were permitted to receive them. He held in his hand an account of the recent capture of the city of Ningpo by Captain Dew, a commander in Her Majesty's service. That officer stated that he "found it necessary to capture the city and drive the rebels out," but he did not quote under what authority he did this, although he spoke of an insult having been offered to our flag. His act seemed to be characterized by the wilfulness of the buccaneers of old. The public journals gave a somewhat different version of the affair. There was a battery at Ningpo, which Captain Dew demanded should be disarmed, and, of course, his demand was refused. A celebrated Chinese pirate, who had so large and powerful a fleet that the Imperial Government were never able to put it down, arrived in the river at Ningpo, and came up in the midst of the English and other foreign ships. An arrangement was immediately made by Captain Dew with the pirate, who had the ex-Governor of Ningpo on board, that the city should be bombarded the next morning. Of course, the rebels returned the fire, and our vessels came in for their share of it. And whom did we put in possession of the city? This pirate chief, with all his followers. The result was that the people flew in all directions, seeking for Europeans to go into the city and stay to protect their houses from being plundered by the pirates, our allies. On their return many found their houses only a heap of smouldering ruins, and their property, which had been in the hands of the rebels for five months without being destroyed or even in many instances taken out of their houses, was now entirely destroyed or wholly at the mercy of the pirates, who were allowed three days for plunder. These facts were quite sufficient to show that in our conduct towards the Taepings it was the case of the wolf and the lamb over again. The lamb might be drinking at the upper or the lower part of the stream, it was all the same, he was to be devoured. The hon. and gallant member then referred to the property taken at the capture of Kah-ding. We had, he said, taken their plunder from the rebels: but did we hand it back to the poor people to whom it belonged? No, we treated it as prize. Having robbed the robbers, we appropriated the spoil as if it were our own. Turning next to the occurrences at Shanghai, the hon. and gallant gentleman described the attack made upon the Taepings there by our force as uncalled for and unprovoked. The Taepings were a people who asked for our friendship, and if they had been allowed to enter and take possession of Shanghai as they had done at Ningpo, where there was not a single case of their having done any injury to Europeans, although there were some cases of Europeans having done injury to them, he believed that Shanghai would at this moment have been a free port, and the river there as safe and secure as the Thames. The hon. and gallant member concluded by asking the questions of which he had given notice, - viz. whether despatches had been received respecting the recent naval and military operations in China, and whether they would be laid immediately before the House, and whether the property taken at the capture of Kah-ding had been declared prize of war.

Mr. WHITBREAD, in reply to the question of the hon. and gallant member, said that no claim upon this country was likely to arise on account of services performed on behalf of the Government of China. The notice to officers serving under the Chinese Government was as follows:-
"Service performed under the Imperial Government of China will not be considered as service in the Navy, as regards pay, time, promotion, &c. In the event of the senior officer in command having the power, under the Imperial Chinese Government, of awarding promotion in that service to officers serving under his command, the same will not be considered as a claim to promotion in the Royal Navy. In the event of an officer being wounded in this service he will not be entitled to a pension for wounds; nor, if killed in action, will his widow he entitled to any more than the ordinary pension awarded to the widow of an officer dying while on half-pay."

"CALCUTTA, Nov. 22.

"It is long since India passed through a year so destitute of political incident or even ordinarily interesting news as this. Even 1856, Lord Canning's first year of office, was not so dull. In default of public topics of their own, residents here watch with keen eagerness the course of the American struggle. War has fortunately deserted southern Asia for such distant places as China and Herat. The two regiments of Bombay Beloochees which we sent in the course of relief to the former have arrived, and everything is ready for Captain Osborn and Mr. Lay to commence operations there. ...

"Head-quarters, near Kahding, Oct. 24,1862.

"Sir,- I have the honour to report, for your information, that the Chinese authorities having expressed their willingness to place a garrison in Kahding if the allied forces would recapture it for them, the place was taken by storm, after a bombardment of two hours, this morning, by the force under my immediate command as well as the British naval force under Captain Borlase, C.B., and the French troops, placed respectively at my disposal by Vice-Admiral Sir James Hope and Captain Faucon, commanding His Imperial Majesty's forces in China; also the so-called Ward's force, under the command of an American (Colonel Burgoviene), and Lieutenant Kingsley's, 67th Regiment, battalion of 500 Chinese, and six mortars worked by Chinese under lieutentant Cane, R A.

"The guns and mortals were got into position during the night, and opened fire so soon as the walls could be seen. At 8 o'clock, two practicable breaches having been made,the French and British each established their bridges, the British under the direction of Lieutenant Knevitt, R.N., and Lieutenant Lvster, R.E. The storming parties of the 31st and 67th Regiments, under the command of Captain Christian, 31st Regiment, then planted their ladders and entered the place without opposition, the enemy escaping by the opposite side of the city.

"The place had been considerably strengthened since our last visit by an outwork made to flank the walls, and protected by a sort of bomb-proof, which, however, was not proof against 8-inch mortar shells.

"I gave over the place to Colonel Burgoviene and his men, and, except the storming parties, none of Her Majesty's naval or military forces were allowed to enter it.

"The recapture of Kahding completes the radius of 30 miles round Shanghai, which it was decided should be cleared of the Tapeing rebels.

"I trust that the excellent conduct of the troops under very tempting circumstances, and the very arduous nature of the service, will be favourably considered.

"I wish to mention for favourable notice Captain C. Gordon, commanding Royal Engineers; Captain Mansergh, Deputy Assistant-Adjutant-General; Captain Gammell, Deputy Assistant-Quartermaster-General; Dr. Rennie, 31st Regiment, senior medical officer; Assistant-Commissary-General Thompson, in charge of Commissariat; Lieutenant Jebb, 31st Regiment; and the Prince Witgenstein, of the 1st Prussian Lancer Guard Regiment, who acted as my Aides-de-Camp.

"I take this opportunity of recording the great assistance I have invariably received on the occasions of the various expeditions from Mr. Consul Medhurst, and Mr. C. Alabaster, of the Consular service.

"I also wish to mention the services performed by Commander Strode, of Her Majesty's ship Vulcan, who was employed during the whole of the operations against the Taepings, and whose name was inadvertently omitted in my recommendatory despatch; also of his first lieutenant Lieutenant Grant.

"Commander Strode had the working of the naval 32-pounders on all occasions when they were used, and was assisted by Lieutenant Grant.

"In transmitting a list of the casualties marked (B), I have much satisfaction in calling your attention to the senior medical officer's report (herewith forwarded) on the health of the field force.

"I have, &c.,
"C. STAVELEY, Brigadier-General, Commanding Her Majesty's Troops in China.

"The Right Hon. the Secretary of State for War, War-office, Pall-mall, London."

"(B.)
"RETURN OF CASUALTIES AT THE STORMING AND CAPTURE OF KAHDING, OCTOBER 24, 1862.

…

"NAVAL BRIGADE.

"Her Majesty's ship Impérieuse.- 1 petty officer and 1 seaman severely, and 1 seaman slightly wounded.
"Her Majesty's ship Euryalus.- 1 petty officer and 2 Marines severely, and 1 seaman slightly wounded.
"Her Majesty's ship Pearl.-1 seaman mortally, 1 Marine Artilleryman severely, and 1 seaman slightly wounded.

ADMIRALTY, JAN. 9.

A despatch, of which the following is a copy, has been received from Vice-Admiral Sir James Hope, K.C.B., the Commander-in-Chief of Her Majesty's Ships on the East India and China Station, relating to the recapture of Kah-ding, near Shanghai:-

"RECAPTURE OP KAHDING.

"Head-quarters, near Kahding, Oct. 24, 1862.

"My Lord,- You will be pleased to acquaint the Lords Commissioners of the Admiralty that the force noted underneath moved out of Shanghai on the 22d inst., under the command of Brigadier-General Staveley, Captain Faucon, and Colonel Borgoviene, of Ward's Chinese Corps; and that Kahding; was retaken this morning after a feeble resistance.

"I have, &c.,
"J. HOPE, Vice-Admiral and Commander-in-Chief.

"The Right Hon. Lord Clarence Paget, C.B., M.P., Secretary of the Admiralty."

HOUSE OF COMMONS, Thursday, March 19.
NAVAL AID TO CHINA.

Mr. ADDINGTON asked the Secretary to the Admiralty whether the officers of the Royal Navy now in the service of the Emperor of China had received permission from the Admiralty to wear the uniform of Her Majesty's Navy during the period of such service; and whether there would be any objection on the part of the Government to produce a copy of the instructions given to Commodore Sherard Osborn on his proceeding to China.

Lord C. PAGET said that the officers who were about to serve under the Chinese Government were not entitled to wear Her Majesty's uniform in that service. As to that part of the question relating to instructions given to Commodore Osborn, he had to state that the Admiralty issued no instructions to that officer. He was absent on foreign leave, and would retain his half-pay, as he and other officers were, by an Order in Council, allowed to serve under the Chinese Government.

Mr. ADDINGTON asked whether the noble lord was aware that the naval uniform was worn by those officers.

Lord C. PAGET believed that the Emperor of China had established a uniform for the naval officers. (Laughter.)

Mr. ADDINGTON said he spoke from information he had received when he stated that officers with Commodore Osborn were wearing the naval uniform.

Lord C. PAGET observed that all he could say was that they were not entitled to wear Her Majesty's uniform.

LONDON, SATURDAY, APRIL 4, 1863.

From time to time we have announced the progress towards completion of the little fleet, now fitting out for the service of the Government of China. Three ships have already sailed - the Pekin, the China, and the Amoy; the first two despatch vessels, and the third a gunboat of light draught. These three are now making the best of their way to the Cape of Good Hope. Three others, of which one is a despatch vessel and two are gunboats, will almost immediately be completed by the contractors; and, as we may be sure that Captain OSBORN'S ducklings will be turned into the water as soon as hatched, the English portion of this China Expedition may be practically considered as afloat. Some other vessels are being built in America; but all are heavily armed, sea-going craft, able to buffet with the tempests of either of the stormy Capes. There are others of a lighter draught and more tender construction, intended for the narrower and shallower of the inland waters, which are to be constructed at Whampoa. When united, these vessels, of which the largest is a despatch vessel, and the smallest will be a tiny river steamer, will form a very respectable mosquito fleet. They are not Warriors, and they are not armed with guns to pierce Warrior targets, but they are sufficient for the purpose in hand. They have been all built and armed under the immediate eye of Captain OSBORN, who best of all knows the exigencies of the service to which they are to be put, and who can also appreciate every advantage offered by the latest discoveries in naval gunnery and shipbuilding. The force will be as efficient as the means at command and the necessity of sailing half round the world allow. It will certainly be strong enough to sweep before it any sea or river enemies it may find in China. If it does not number a cupola ship or a steam ram among its constituent vessels, it is at least a very good example of what can be done with care, skill, and economy towards forming a fleet for about half the money cost by one of our Ironclads. It is manned also with a picked force - chosen as a force which is to show an example of discipline as well as of valour ought to be chosen. The Order in Council in England and the permission of the FOREIGN MINISTER in Paris have practically placed the naval services of England and France before Captain OSBORN for selection - for this is an adventure in which every professional seaman possessing youth and health and ambition would be anxious to take part; and not only have the officers been selected with the greatest care, but the crews have been picked like yachtsmen. Mr. LAY is already gone, and so soon as Captain OSBORN has pushed his last ship from the shore he also will travel overland to meet his flagship, now preparing to depart towards the rendezvous on the other side.

From this small but carefully equipped force we expect great achievements. It is a curious proof of our confidence in the appliances of civilization and in the skill of our countrymen, and it is a pleasant token of the improvement in public morals, that while we send out six small ships and a little band of men to take part in the civil war and intestine commotions of a conglomerate of mankind numbering one third of the human race we never ask ourselves whether it is possible that so small a force can have any effect upon such a vast Empire, but only whether the cause in which they go is a good cause, and whether the use they will make of their power will be such as may be creditable to a Christian people. Reiterated wars and continual layers of Income Tax have forced upon our public some slight study of Chinese matters, and, although the popular notions of China are still somewhat vague, there are a few ideas which have become tolerably fixed in the mind even of a London elector. We have all, for instance, come to the conclusion that the marauders who are called Rebels, or Taepings, or Tu Fei - which last designation, although Colonel SYKES gravely states it as a name of a rebellion, means simply "highwaymen" - are not a political party or a national party, but simply a social disease. We know now that they are only the idle, the destitute, and the ignorant, congregated upon an enormous scale and plundering in great multitudes; and we know that there is nothing to be said in their favour, except that they may occasionally aid the least scrupulous and respectable of our merchants to smuggle in goods duty free. Sometimes, indeed, as at this moment, they may lessen the price of silk at Shanghai by plundering the silk districts and selling their booty, and by driving all the up-country stocks into that Treaty Port as to a place of safety. Mr. BRUCE has, in a despatch to Earl Russell, attributed the existence of this predatory multitude to three causes - first, a dense population pressing closely upon the means of subsistence; secondly, a gradual deterioration of the military force of the Empire; and, thirdly, the influence of an absolute reliance on moral teaching as a sufficient check on the conduct of rulers, and a sufficient guarantee for the obedience of the people. These causes are well assigned, and each has had its operation in producing the pernicious effect we now see. But, whatever may be the causes, the effect is by this time universally understood. It is said there are agents now in London buying up and shipping arms and powder to be smuggled into China and bartered to these Taepings in exchange for the plunder gathered in Hangchow and Soochow and in the rich districts of the silk manufacture. The proceedings of these worthies will, however, only illustrate the shrewd remark to be found in a despatch from Lord Elgin, printed in the last China Blue-book, "The moral evils of smuggling in China are not redeemed by any material benefit to the general interests of trade." Whenever those arms are used, it will be against the interests of European commerce as much as against the Imperial Government, and against all feelings of humanity.

What is this fleet going forth to effect? We do not ask what the plan of operation may be, for in all probability none has yet been resolved upon - but what are its general objects? These have been already stated with more or less precision, but as the explanations are buried in reams of diplomatic correspondence they have not been read by the public, Let us, then, cull such information as we can obtain from the Blue-books. In the first place, this Anglo-Chinese fleet goes to establish Imperial authority on the Yang-tze. In this object political and commercial considerations equally combine. In a despatch from Mr. WADE which is printed in the Blue-book before us it is clearly shown that the Taepings have never "held" any province of China, although they have infested several. They have, however, held one city. Pillaged, ruined, and decayed as is the once magnificent city of Nankin, broken to potsherds as is its Porcelain Tower, burnt or dispersed as are the celebrated libraries of the Golden Island, desecrated as is the cemetery of the Ming dynasty, whom these Taepings commenced by professing to revere, Nankin has still been undoubtedly "held " by these people. Nankin was the Southern capital of the enormous Empire. If there had been any life or constructive power in the Taepings, it might have been the capital of a new Empire carved from the too unwieldy old one. Ten years' experience has, however, proved that there is nothing of these qualities in the Taepings. Instead of being the capital of a Government, Nankin is the stronghold of robbers, whence they issue, and to which they return. As a matter of prestige to the Imperial arms the first serious task imposed upon Captain OSBORN will be to recover Nankin. The Taepings foresee this, and are using their best endeavours to provide against it; but, as they have already ruined the city and exhausted the neighbourhood, it is not probable that the defence will be much prolonged. This will be a blow upon the head of the rebellion, but it will also be good service done to honest traders. The Yang-tze river in China - an Empire without roads - is the great highway; and, as Nankin is on the Yang-tze, the establishment of this piratical power at Nankin is like the establishment of a confederacy of highwaymen half-way up Cornhill. Any set of policemen who would destroy such a nest of depredators would deserve our thanks. We shall be very glad to hear of the fall of Nankin, and of its being held, to prevent bloody reprisals, by Captain OSBORN'S force.

To explore the inner waters, re-open the traffic upon the Grand Canal, establish telegraphic communications along the principal thoroughfares, and teach the Chinese the use of steam, is the second and not less important object of those who are now going out to China. There are many great rivers in China yet to be surveyed, and many great commercial cities still unknown. It is not that civilization is wanted, but there is in China a hitch in its progress. After running far ahead of the rest of the world it has stopped, and has let the rest of the world pass it. Clothed with Imperial authority, and having conquered Nankin, Captain OSBORN will be able to present steam and electricity to minds perfectly capable of understanding their practical importance directly they see them in work; and if steam and electricity once take hold of the interior of China, and of the commercial instincts of the people who dwell there, the "hitch" is removed, and civilization will march forward again there as it does here. A third object is to put down the piracy which now exists between the open ports. But all these are second to the first great necessity of breaking up the nests of the Taeping robbers, and putting the Imperial Government in a position to protect its own people and discharge its obligations towards other Powers. The first is a necessary preliminary to the other two. All these, however, are objects which must command the sympathies of every one who does not seek to make money by supplying the Taepings with the instruments of robbery and massacre, or who does not desire to use the Taepings as a covering party to some operation of smuggling, or who is not under the influence of some incurable delusion. There are persons, of course, in each of these categories, but they are, we apprehend, very few in number and utterly without consideration either here or in China.

The Kiang-Soo left Southampton Docks, where she received her engines and machinery on board, about half past 11 o'clock on Wednesday morning, and steamed rapidly to Stokes Bay, where she was at once placed on the mile, and the result of four runs was as under:- First run, 3 min. 59 sec., equal to 15.063 knots per hour; second run, 3 min. 8 sec., equal to 19.149 knots; third run, 4 min. 4 sec., equal to 14.754 knots; fourth run, 3 min. 15 sec., equal to 18.462 knots; the Admiralty mean of the whole being 16.993 knots, or 19 3/4 statute miles per hour. Revolutions of engines, 45; pressure of steam, 27 lb.; vacuum, 26 in, The engines, which are of 300 nominal horse-power, worked up to 2,279, being over 7 1/2 times their nominal power. The vessel's mean draught of water was 9ft. 3in. At her highest rate of speed there was scarce any perceptible vibration, the machinery working with the greatest freedom, and she steered very easily. The boilers gave out an unlimited quantity of steam during the day. After the four runs were completed the vessel's head was put to the eastward, and she ran rapidly through Cowes Roads, down the Solent, to the Needles, subsequently returning to Stokes Bay for a trial of her speed at half power. With only two boilers at work she traversed the mile in 4 min., or 15 knots per hour, and a second time in 4 min. 27 sec., or 13.483 knots, the mean of the two being 14.241 knots per hour, with the exercise of only half her steaming power; revolutions, 33; steam, 20 lb.; vacuum, 27 in.With such extraordinary results as these the Kiang-Soo was unanimously pronounced by all the naval and scientific authorities present to be one of the fastest vessels afloat, and the ship and engine builders were severally warmly congratulated on the success of their labours. Among the gentlemen on board were Captain Forbes, R.N., who is appointed by Captain Sherard Osborn to the command of the Khang-Soo, and lieutenant Vincent, who is to act as first lieutenant; also Captain Jones, R.N.; Captain Comerall, R.N.; Colonel Johnson, Captain Johnson, Captain Day, Lieutenant J. Pitman, R.N.: Mr. J.D. Parminter, paymaster of Her Majesty's ship Dauntless; Dr. Heath, staff surgeon, and Mr. Williams, chief engineer, of the Dauntless; Mr. Jeffrys, of the Admiralty; Mr. S. Chapman, R.N., Captain Sherard Osborn's private secretary; Mr. T. Kinnear, engineer-in-chief of the Chinese navy; the Mayor of Newport (Sir. F. Pittis), Mr. C.A. Day, Mr. J.A. Mew, Mr. T. Summers, Dr. Summers, &c. Most of the naval officers of the expedition have served in China, and some of those present on Wednesday highly distinguished themselves during the late war with that country. The Kiang-Soo is intended as a despatch boat for the Chinese navy, for the special personal use of Captain Sherard Osborn, the commander-in-chief of the Anglo-Chinese expedition, and will sail from London for her destination about the 25th of the present month.

HOUSE OF COMMONS, Tuesday, May 19
ENGLISH OFFICERS IN CHINA

Lord NAAS asked the Secretary of State for the Home Department how many licences had been issued under the Royal sign manual granting permission to British officers to enter the service of the Emperor of China, and to fit out and equip vessels for the Chinese Government, in consequence or the request made by the Under-Secretary of State to Mr. Olive in his letter dated July 30, 1862.

Sir G. GREY said that two applications for licenses had been made, but when they were made out the applicants did not avail themselves of them. An Order in Council had subsequently been issued which made the licences unnecessary.

HOUSE OF COMMONS, Monday, June 6

Lord PALMERSTON;- I listened with great attention to the very long and able speech of the noble lord who began this discussion, and who showed that he had gone through with the greatest industry the details of all the events which have happened in China for several years past; but I was at a loss to understand the conclusion which he arrived at - that of censure on the Government for the course of policy which they have followed. In the first place, it was rather surprising to hear from gentlemen on the other side of the House such enthusiastic defence of rebels (laughter), and to be told that rebellion is so sacred an institution that it is quite culpable in the Government to give any help to a friendly Power to suppress it. (Laughter.) Theirs is a new doctrine. Does that principle apply to Italy? Are hon. gentlemen opposite prepared to say that they would apply the same protection to those who have cast off their allegiance to former Governments in Italy as they are prepared to show to these Taepings in China ? (Hear, hear.) But the main question is - has the policy pursued by Her Majesty's Government in China been attended with good results? - is it founded in good faith, and likely to be attended with advantage? In years gone by, though not long gone by, we were perpetually in a state of squabbles and hostilities with the Government of China. We were attacked and condemned by hon. Gentlemen, who told us that we were engaged in hostility with one third of the human race, and that we were needlessly risking all the commercial interests of the country connected with China by those quarrels and conflicts with the Chinese Government. We were told to abstain from such a course of proceeding, and let affairs take their course. The state of things is now altered, and those very hostilities which were found fault with have resulted in this, - that we are now on the most friendly terms with the Government of China, and that we have access to the supreme Government, from which we were before debarred by local and provincial authorities. The noble lord himself has quoted returns, showing the enormous increase of our trade with China within the last two or three years. {Hear, hear.) Compare the state of our commerce in China some years ago, when we were contented with the limited intercourse of the East India Company to one portion of the Chinese Empire, with the great development now given to the industry and commerce of this country over the whole surface of the Chinese Empire. Look to the great extension of that commerce which is likely to arise, if, by our friendly assistance, we should be able to place the internal arrangements of China on a more regular footing. A great part of the noble lord's speech seemed to me to be high praise of the Government. If I had been listening to anyone moving a vote of approval I should have expected him to repeat those very things which the noble lord, in the simplicity of his mind, put forward as the ground of complaint against Her Majesty's Government. ("Hear, hear," and laughter.) He said, "What are you doing? You are teaching the Chinese authorities the arts of government practised in Europe. You are enabling them to collect their revenue on systematic principles, and to increase it by the regular manner in which their Customs duties will be collected; you are giving them the means of preserving order in their territory, and you are allowing your soldiers and sailors to enter into the Chinese service for the purpose of suppressing those disturbances which lay waste and desolate from time to time the finest portions of the Chinese Empire." (Hear, hear.) Well, we admit the charge, and we consider it a great merit on the part of Her Majesty's Government in having done these things, and I am surprised and gratified at the noble lord for coming down here and, in an endeavour to bring charges against Her Majesty's Government, being compelled to enumerate facts which, I think do infinite credit to the Ministers. (Hear, hear.) I hold that since China has altered its policy with respect to foreign nations and with respect to the English nation - that since the policy of China, as conducted by Prince Kung and associates equally liberal with himself, proves that China is now prepared to enter into intimate relations with foreigners instead of keeping them at arm's-length, and endeavouring to prevent all intercourse whatever with them - that, since the policy of China is to encourage commerce with the nations of the world, it would be suicidal on our part not to endeavour to assist the enlightened Government of China in those efforts of improvement. (Hear.) While the noble lord and hon. Gentlemen opposite admit that we are entitled, and, indeed, bound in duty, having regard to British interests, to defend the treaty ports, they complain that we took measures to rescue one of them - Ningpo - from the occupation of the Taepings. (Hear, hear.) The admission of the noble lord is an answer to the accusation which he makes against us. There is nothing inconsistent with the practice of nations in one friendly Power lending to another officers to drill and direct its troops. Therefore, when we authorized Queen's officers to enter into the service of China we did nothing which has not been done in innumerable instances, and which is not perfectly justifiable. (Hear.) I nm rather amused by what the noble lord said as to its being one of Captain Sherard Osborn's duties to suppress piracy. It is not necessary, he told us, to send ships of war for that purpose, because anybody can destroy a pirate if he meets one on the high seas. Yes, but you must first bell the cat. (Hear, hear.) It is all very well to say that you are at liberty to destroy any pirate that crosses your path, but then the chances are that he may destroy you. (A laugh, and "Hear, hear.") That is just what is happening in China. The coast of China is infested with fleets of pirates, - some Chinese and some Europeans, - who prey on all ships of commerce which they meet. It is of no use to say that merchant vessels may destroy these pirates. One of the great objects which Captain Osborn has in view is, by the squadron under his orders, to sweep these pirates from the waters, and to restore security to the commerce of Europe and China on the coasts of the latter. (Hear, hear.) The noble lord went into a description of the great encroachments which Russia is making in China, and told us that France also has views of ambition on parts of Asia in connexion with that country; and then the noble lord warns us that the course we are pursuing may lead us into conflict with these two great Powers. Our present course is to strengthen the Chinese Empire (hear, hear), to augment its revenues, and to enable it to provide itself with a better navy and army. That is one method of inspiring other countries with caution as to any future encroachments they might be tempted to make on China. But what is the natural inference to be drawn from the advice which the noble lord offers? It is that we ought to withdraw from China our Minister ("No"), our settlements, our merchants, and abandon the country to France and Russia. (Hear, hear.) France and Russia, the noble lord says, are bent upon aggressions in China, and if we are there when they come we are sure to be brought into collision with them, and therefore we had better retire at once and leave China to the future mercies of those two Powers. I do not at all admit the wisdom of that policy. (Hear, hear.) It is quite true that RUSSIA has of late made very great encroachments on the northern provinces of China. It is also true that France, a Power which has a great tendency to extend itself (a laugh), has carried on operations in Asia. France, Russia, and England are however, perfectly agreed, for the present at least, in their policy with regard to China. All concur in supporting the Imperial Government; and therefore our policy, as at present conducted, has no tendency whatever to lead us into collision with other Powers. (Hear, hear.) Our Minister at Pekin is on the best possible terms with the representatives of France and Russia, and, so far from there being any jealousy or antagonistic views between the three, I am happy to say that we all share the feeling that it is our mutual interest to restore, if possible, tranquillity to the interior of China, and extend the commercial relations between Europe and that nation. (Hear, hear.) I am quite at a loss to see in what respect we are blameable. In scanning the future the noble lord apprehends European wars are likely to arise out of our commercial relations with China. I, on the contrary, anticipate that the policy we are pursuing will open to us a still larger and more useful sphere of commercial industry. {Hear, hear.) Depend on it that a country peopled by nobody can tell exactly how many hundreds of millions of men must afford great resources and means of development for trading enterprise. The Chinese are a commercial race. There has been no hostility towards Europeans among them as a people. The hostility was entirely confined to a number of mandarins, whose interest it was to maintain certain monopoly of their own, and has been swept away. The Government of China is now friendly, and I have not the least doubt that, if the internal disorders of the empire could be suppressed, we should find in commercial intercourse with China an important source of national wealth and prosperity. (Hear, hear.) We should then behold the result of that faithful, straightforward, friendly policy which we are now pursuing. If the House will only agree to wait the development of our policy. I am confident they will and that, so far from deserving the censures of the noble lord, it has been eminently advantageous both to this country and to China, and deserving of the thanks of Parliament. (Cheers.)

CHINA
(from our own Correspondent.)

HONGKONG, MAY 30.

From Shanghai it is stated that Major Gordon is preparing for an attack on Quinsan, a few miles distant from Taitsan. On the capture of the latter city he went to Quinsan and remained two days before it, but for some reason not publicly given, then returned with his levies to Soong-Keong without striking a blow. The foreign settlement, however has not been without some excitement, as the Footae [provincial governor-general] has quickly shown his perfect appreciation of Sir F. Bruce's declaration of the full right of the Imperial Government to tax Chinese subjects residing within its precincts, and by his orders the Taoutae [governor] has published a proclamation, levying a house-tax on all Chinese living within the settlement. In it much stress is laid on the want of funds to meet the expenses of the Soong-Keong force, and the expected flotilla of Captain Sherard Osborn; and intimation is given of an intention to employ foreigners to assist in the collection of the tax. Apparently, foreigners will soon become indispensable as collectors of every branch of the revenue. The proclamation is said to put prominently forward, in support of the legality of the tax, the various despatches of Sir F. Bruce on the subject. From the Yangtsze river and from Tien-tsin there are continued accounts of threatening movements of rebels.

At Ningpo trade is still much interfered with by numerous robberies committed by the lawless foreigners congregated there, and the Taoutae is represented to be very anxious to get rid of the French contingent. That functionary has just furnished an additional illustration of the little faith that can be placed in Chinese officials, even of high rank, by making an impudent attempt to levy unauthorized "squeezes" on all imports and exports through the agency of the compradors of the various mercantile establishments, whose services, secured without the knowledge of their employers, and of course without that of the Consuls, were to be rewarded by a commission of 10 per cent, on the amount collected. Fortunately, the scheme was discovered, and steps were taken to defeat the ingenious but knavish plan. At Ningpo also there are rumours of intended movements of the rebels towards it.

CHINA.
(From our own CORRESPONDENT.)

SHANGHAI, SEPT. 3.

Since the departure of the last mail the Imperialists have succeeded in wresting from their opponents another large town, called Fung-chin, lying about 50 miles south-west of Shanghai. The attacking force was commanded by Macartney, formerly Burgevine's military secretary, who left Soonkiong on the morning of the 23d ult. With 700 drilled Chinese, six 12-pounder howitzers, and five mortars, and marched to a village about two miles from Fung-chin, where he was joined by a body of mandarin soldiers from Kin-san-way, one of the few places Ward [Frederick Townsend Ward, 1831-1862, American soldier of fortune, who had served with William Walker in Nicaragua and with the French forces in the Crimean War] captured which the rebels did not succeed in recovering. The attack on the town was made on the 27th; it had been fortified by the rebels by earthworks, ditches and stockades, and being surrounded by several creeks offered formidable obstacles to an attacking party. So soon, however, as a breach had been effected in the fortifications, the boats were ordered to form bridges over the intervening creeks, and the storming party, headed by four companies of drilled Chinese, to advance to the assault. They did so gallantly, many swimming the creeks in their eagerness, and though checked for a moment by a burst of flames from the houses in the quarter, which had been most severely shelled, carried the place in less than half an hour, driving the rebels back on Kia-shing, a large city on the borders of the Che-keang province. This success is another proof of the extreme change operated in Chinamen by European drill and European leading. The 700 disciplined men whom Macartney took with him from Soonkiong had never seen an enemy since he first commenced drilling them, some five months ago; yet they proved themselves quite as trustworthy and quite as superior to the Mandarin soldiers as Gordon's men [Charles George Gordon, 1833-1885, British officer who subsequently took over Wards army when the latter was killed; in 1873 he entered the service of the khedive of Egypt and was cut off and besieged at Khartoum; the British relief expedition reached the garrison two days after it had fallen to the Mahdists and Gordon had been killed].

Five mouths ago they would have been utterly incapable of attacking so strong a place as Fung-chin had they been five times as numerous. Major Gordon is preparing for an expedition into the lakes to the south of Quinsan, where the rebels are reported to have a number of gunboats, and to be strongly entrenched in several villages. He will, of course, take a strong detachment of troops, but the principal part of the work will have to be done by his two small steamers - the Hyson and the Firefly, and where the water is too shallow for these to act, by mandarin gunboats. These, although like Mandarin soldiers, they are worth nothing by themselves, have several times fought well when in company with the disciplined troops, whose fire is no small assistance, as it can be poured in from the banks of the creeks with great effect. No attempt is likely to be made against Soochow for a month or two. It is contemplated to form a strong naval brigade of the larger portion of the crews of Sherard Osborn's vessels to aid in it. These, with some heavy guns from the fleet, will render success almost certain. People are already talking of a railway to Soochow, and the project is regarded with favour by the Chinese merchants. Sherard Osborne himself arrived yesterday from Singapore in the Pekin, one of his own vessels. The Amoy and Kiang-se only are now awaited to complete the fleet.

The proclamation by Lee Footai, offering a reward for Burgevine's assassination [Henry Andreas Burgevine, 1836-1865, American freebooter originally serving under Ward], created so strong a feeling of indignation among the residents that the Consuls of the several treaty Powers resolved to address to him a joint remonstrance. The document which was, I believe, drawn up by Mr. Seward, the American Consul, is strongly worded and to the point. After expressing the general surprise which the appearance of such a proclamation caused, it says:-

"The undersigned see in this proposition a direct disregard of treaty stipulations.
"The undersigned are aware that, according to American, law, the act of General Burgevine in taking up arms for the insurgents is an offence than which none could be greater, but they are also aware that the punishment, therefore, as provided in the American treaty, and similarly in all others, can only be inflicted by the representative of his own Government, and, further, that were there no treaties in existence, he ought only to be punished according to the rules of civilized warfare.
"The undersigned are agreed in saying that, as regards General Burgevine, the utmost extent to which you may go is to procure his arrest, and this is true of the subjects of all treaty Powers."

After thus briefly expressing their opinion the Consuls demand that the proclamation be withdrawn, and remind his Excellency that such measures cannot fail to alienate the sympathies of the Western nations from the Imperialist cause. It must be remembered that the allusion to Burgevine's act in joining the rebels as an offence, than which none could be greater, is made in a legal sense, inasmuch as under the American law he has subjected himself to capital punishment, under the following section of the Act providing for such cases:-
"Sect. 15. And be it further enacted, that murder and insurrection, or rebellion against the Government of either of the said countries, with intent to subvert the same, shall be capital offences, punishable with death; but no person shall be convicted of either of said crimes unless the Consul and his associates in the trial all concur in opinion, and the Minister also approves the conviction; but it shall always be lawful to convict one put upon trial for either of these crimes, of a lesser offence of a similar character if the evidence justifies it; and when so convicted, to punish as for other offences, by fine or imprisonment, or both."

In a moral point of view the offence is a minor one. Burgevine served the Imperialists well while subordinate to Ward, and though he only fought one battle (at Paokiong) during the three months he was in command, he did much to improve the organization and efficiency of the force. He has received nothing in return but ingratitude and opprobrium, and at the present moment 27,090 taels are owing to him by the local authorities, which he had not the slightest chance of extracting from them. Thus, though the act of joining a cause universally condemned by foreign nations, and against which he had previously been fighting, is generally reprehended, all admit that he had extreme provocation. Be this as it may, there could be no doubt as to the iniquity of an attempt to procure his assassination, or of the impertinence of so open an attempt to act in opposition to treaty stipulations. But Lee Footai thought he had discovered a loophole in the fact that the treaties do not provide specially by whom "foreigners who have been made Chinese officers and have transgressed Chinese law or Chinese territory" are to be judged; overlooking the fact that since it was provided that all foreign delinquents are to be surrendered to their Consuls it was unnecessary to specify particular instances. Trusting, it is to be presumed, partly in this imaginary flaw, and partly in the efficacy of an acute and intricate process of reasoning, to carry his point, he declined to withdraw his proclamation in the following letter, which I quote in extenso, as a model of a Chinese evasive diplomatic document. It is really very clever, although, as the view it advocates is clearly wrong, it, of course, fails to make it right:-

"LEE FOOTAI TO THE CONSUL
"We send you a reply. It appears that on the 9th of the present moon you saw in a newspaper a proclamation from us offering 3,000 taels for the delivery of General Burgevine dead or alive. You were surprised to see it, and thinking you saw in it a direct disregard of the treaty, asked us to withdraw said proclamation.
"Burgevine consented to become a Chinese Mandarin and General in the army. Having violated Chinese law he should be punished according to the Chinese mode of punishment, which is different from that which your countrymen should receive when they transgress and are sent to their Consul for punishment. Foreigners who have been made Chinese officers and have transgressed Chinese law on Chinese territory, by whom should they be judged? The treaty does not say. How then say you that we have disregarded the treaty? Moreover, Burgevine's offence is not to be compared with other offences. He having been made a Mandarin of the third grade, and having disobeyed orders, such a transgression is egregious. The Board of Trade and we have treated him leniently out of regard to your country. How is it, now that he has the hardihood to join himself to the rebels, and make himself the enemy of China and all the foreign defence operations? Having become an insurgent, we cannot regard him as an American citizen. If you still regard him as such, why wait till he has committed such an offence? If a Chinese goes to America and becomes a, citizen, and an officer of the army through the favour of the President, then suddenly get up an insurrection, perhaps you would let him have his head! (ironically spoken); could Chinese protect him? Now, doctrine is the same in China as in America. In order to maintain peaceful relations you ought to assist us to apprehend him. By no means can you let him do as he please, and defend him in it. Now, we have charge of all the military operations in Kiangsoo; to apprehend Burgevine is to apprehend an insurgent.
"Now, in regard to procuring the arrest of Burgovine, all the Consuls agree in saying that that is the utmost that we can do. Our proclamation spoke only of arresting him, nothing was said as to how he should be judged. In regard to the words 'dead or alive,' our view was that perhaps in apprehending him fighting might be necessary, in which case he might be shot by a gun or a cannon; and we could only bestow the reward in accordance with the language of the proclamation.
"Now all the Consuls of the treaty Powers willingly assist us in protecting this region. At the same time it gives protection to the trade of all the countries interested. The attempt to arrest Burgevine is an effort to give protection to this region, and to all the honest mercantile community; this is a benevolent and righteous undertaking. All the countries represented here desire to be guided by the dictates of reason. It is impossible for them to withdraw their sympathies from us on account of Burgevine's matters. Let your heart be at rest; our proclamation was not adapted to excite surprise, and need not be withdrawn. Hence we write; when this shall arrive you will see.
"7th moon, 10th day (Aug. 23)."

In the early part of July Colonel Cooke, the commandant of the Anglo-Chinese force at Ningpo, visited Major Gordon at Quinsan for the purpose of concerting measures for a joint autumn campaign, and was supplied by the latter with some 500 muskets and rifles, which the parsimony of the Ningpo officials had refused him. The latter averred as their reason that they were afraid of the Che-Keang Taoutai [governor], who is one of the old school, and does everything he dares to check and crush the foreign-led contingents. His subsequent behaviour would seem to confirm the statement. When Cooke arrived in Ningpo with the arms, a supply of ammunition and some shell, the Taoutai actually refused to sign the Customs' chop, necessary to enable them to be landed, and persevered in his refusal until Cooke out of patience declared he would land them by force. This overcame his objection, but he obstinately refused to pay the freight, and Cooke has had to do so out of his own salary. Can any conduct be conceived more insane? Instead of expressing gratification that the force on the presence of which the safety of Ningpo depends - for the British have at present neither soldiers nor gunboats there - had been partially rearmed without involving him in expense, he desires to reject the offered boon, and to retain a set of useless old arms which the men are afraid to fire. Before Captain Dew, of whom he stood greatly in awe, left, that officer induced him to buy 1,000 good, new muskets for the force; but directly he had left they were sent off to Lee Futai before Fo-yang, and are, doubtlessly this time one-half in the possession of the rebels. The disciplined Chinese are about to start, on another expedition against the rebels, to a place called Wan-ta-quan; Chapoo is publicly mentioned as their destination, but this is only a blind. The Anglo and Franco Chinese contingents will work together in amity again now, as the Commandant of the latter has at length agreed to pay over to the former all the prize-money for Shang-yu, Shao-shing, and Sao-tsan, which he had contrived to get into his own hands and obstinately refused to part with. The whole amounts to some $180,000, and I suppose the share of the Anglo-Chinese officers, who are not more than eight or ten in number, will amount to about one-third. It is rumoured, both here and in Ningpo, that Burgevine intends to attack Shao-shing, and has left Soochow with a column for that purpose. There is no authority for the statement beyond rumour, but it is not at all an unlikely movement for him to make, as he has nothing to fear from the British in the Che-Keang province.

CHINA.
(From our own Correspondent.)

SHANGHAI, SEPT. 20.

General Brown [Commander-in-Chief of the British land forces in China] has lately returned from a visit to Quinsan, and has now left for Pekin by the steamer Nanzing. During his stay at Quinsan he accompanied Major Gordon, in the Hyson, to within a thousand yards of the walls of Soochow, and has promised, whenever an attack on the latter city may be determined on, to send a detachment of Beelochees to replace the disciplined Chinese in Quinsan. A column, under command of Captain Murray, R.A., is about to start to garrison Tai-tsan at the same time. These transgressions of the 30-mile boundary appear to confirm a report which prevails that Sir Frederick Bruce [Frederick William Adolphus Bruce (1814-1867), British Minsiter to the Imperial Court] has authorized the employment of our troops, in any way short of actual assault, in aid of an attack on Soochow; which, he rightly says, will be a standing menace to Shanghai so long as it is in possession of the rebels. Sherard Osborn has also gone to Pekin, and I believe one motive of General Brown's journey thither is to support him and Mr. Lay in the pressure they intend to bring to bear on the Chinese Government to obtain payment of 800,000 taels still owing for purchase and incidental expenses of the fleet. Without this Sherard Osborn declares he will not attack Soochow, and in the meantime his men are deserting fast. Rebel agents are busily at work offering high pay and higher prospects to any who will join Burgevine; and many have gone, innocently, and asked for their discharge, with the avowed object of entering the service of the rebels. Another motive for General Brown's visit is to get the Anglo-Chinese contingents here and at Ningpo placed under his orders. It is evident that he sees the folly of the half-and-half support we are at present according to the Imperialists, and the necessity for adopting more decided measures, unless the rebellion is to continue a permanent menace to Shanghai, and check to trade in its neigbourhood. Colonel Cooke has again come up from Ningpo and gone to Quinsan to see Gordon, with what particular object I am not aware. At the last moment the Ningpo mandarins have withdrawn their consent to his projected attack on Wan-ta-quan, and he now wishes to go to Chapoo, a city situated on the Grand Canal, the possession of which by the Imperialists would render communication between Hangchow and Soochow or Nankin much more difficult. The rebels are said to have succeeded in collecting large supplies into Hangchow, and to be strengthening the fortifications and increasing the garrison.

Macartney has followed up his success at Fung-ching by the capture of See-dong, a town situate a few miles from Kia-shing, within the boundary of the Tche-kiang province. This was one of the rebels' principal Customs stations, and a great mart for the sale and purchase of arms and silk. Its loss will consequently be severely felt by them, and the Imperialists will require to hold it in considerable force, as attempts are sure to be made for its recapture. Macartney carried it almost by a coup de main. During the four days succeeding the capture of Fung-ching he occupied himself in collecting boats from the surrounding country to serve as bridges for the troops to cross the numerous broad creeks and rivers by which the country is intersected; on the third night he ventured himself, almost unattended, close to See-dong, which he thoroughly reconnoitred; and the following day, with the aid of the Futai's brother, set about constructing bridges of boats to enable his men to march during the night without check on See-dong. His arrangements were completely successful, and before the rebels were well aware of his intended movement they saw him in their rear. Contrary to their usual custom, they sallied out in force to meet him, and a sharp engagement ensued; in the course of which they received a large reinforcement from Kia-shing. As usual, however, shell carried the day; a few fortunate shots caused a wavering, which a bayonet charge by Macartney's disciplined battalion converted into a headlong flight. Pursuers and pursued entered the town and swept through it together, and within two hours after the commencement of the action the rebels were in full retreat on Kia-shing. The value of the loot found was estimated at $200.000.

Burgevine's acts since he joined the rebels have been a complete mystery. At one time he is reported to have abandoned himself to drinking in Soochow, at another to be devoting his entire attention to the organization of a disciplined force of Chinese; and at a third to be in Nankin. The last information is most likely to be correct, as it was obtained by the Mandarin Ching, Commander-in-Chief of the Imperialist troops before Soochow, from rebel deserters. One of his best officers, a man named Hayes, who was formerly sergeant-major in the army, has been discovered in hospital here in Shanghai, and placed under close arrest. He was severely wounded in the leg in an attempt to recover some stockades which Gordon's men were holding in the neighbourhood of Wo-kong, the last city he took. Two other persons have also been placed under surveillance. It is said that the men who accompanied Burgevine are very dissatisfied with their treatment at Soochow, and if they could get away would leave; but all these are merely rumours, and not at all reliable.

The Futai has recently established two foundries for shot and shell at Shanghai, besides one at Soonkiong. One of the former is under the supervision of a Frenchman, to whom his Excellency advanced 10,000 taels to enable him to start the establishment.

LATEST INTELLIGENCE.
CHINA.

We have received the following telegram dated "SUEZ, DEC. 31.

"Prince Kung having refused to ratify the agreement made by Mr. Lay with Captain Osborn, Captain Osborn proceeded to disband his force.

"The European Ministers protested against Prince Kung having the ships on his own terms, and Prince Kung then requested Mr. Bruce to sell the ships for him. Mr. Bruce having requested Captain Osborn to undertake their disposal, a part of the squadron were to sail for England, and Captain Osborn, with the Keangsoo, Quantung, and Amoy, had sailed for Bombay. Captain Osborn may be shortly expected in England."

THE CHINESE AUXILIARY FORCE.

The following is the correspondence relating to the disbanding of the European Chinese naval force under Captain Sherard Osborn:-

No. 1.
"PRINCE KUNG'S LETTER OF INSTRUCTIONS TO INSPECTOR-GENERAL H.N. LAY.

"Pekin, Oct 24, 1862.

"The Prince of Kung, charged by Imperial authority with the superintendence of foreign affairs, addresses a communication to the Inspector-General, Mr. H.N. Lay.

"The official records show that at the interview which the Acting Inspector-General had with me in the autumn of 1861, he represented that, in order to render our navy efficient, it was absolutely necessary that foreign vessels and foreign guns should be procured. He subsequently addressed rne in writing, begging that orders might be issued to the custom-houses to contribute towards the purchase of foreign vessels and guns. The Foreign-office thereupon memorialized the Emperor on the subject, and His Majesty's assent having been obtained, orders were issued to the custom-houses to pay into the hands of the Acting Inspector-General the amount sanctioned for the above purpose, and the Acting Inspector-General was desired to act without delay.

"The Acting Inspector-General has now come to the capital, and apprised us that all the arrangements connected with the purchase of vessels and guns he has officially handed over to the Inspector-General, Mr. Lay, to carry out on his behalf in England, and that he has remitted the moneys paid by the custom-houses to the Inspector-General Lay, who is proceeding in the matter with the utmost despatch.

"Mr. Hart has stated further that the ability of the Inspector-General Lay is great, and that he possesses a mind which embraces the minutest details; that he is, therefore, fully competent to make the requisite Arrangements with more than a satisfactory result, and he has accordingly requested us to address a despatch to the Inspector-General Lay to serve as his authority.

"In any arrangements which the Acting Inspector-General might have made with respect to the purchase of vessels and guns, there is no doubt that he would have taken the greatest pains and would have left no point unconsidered, but as he has now requested that the management of the whole affair should be entrusted to the Inspector-General, this will be, of course, still more satisfactory.

"I therefore address this despatch to the Inspector-General and transfer the management of the affair in to his hands.

"There are three important points:-
"1.The purchase of the vessels, guns, gunpowder, coal, and the miscellaneous articles for the use of the vessels.
"2. The engagement of officers, gunners, and seamen, and others for services in the vessels; and the arranging the terms and conditions of every description of agreement.
"3. The retention, as proposed, of a sum of money to meet the salaries and wages that may be settled by the agreements, and also to provide for the payment of compensations and other items in time to come.

"The above three points we leave the Inspector-General to dispose of as, in his discretion, he may see fit.

"The money already collected from the custom-houses has been transmitted through Mr. Hart to Mr. Lay, and that still due should be, as collected, handed through Mr. Hart to Mr. Lay, who is alone charged with, the responsibility of its disbursement; and we leave it to Mr. Lay to appoint, if he think fit, a person to help him, and also to make whatever arrangements may in his judgment seem desirable, with a view to the successful carrying out of the objects in view.

"China is in urgent need of the vessels and guns; effort should therefore be made to effect with the least possible delay their completion and despatched to Shanghai, there to await orders. The work (put into the vessels) should be strong, the materials genuine, both of super-excellent quality, that so the high trust we have confided (to Mr. Lay) may be fulfilled.

"In the event of the Inspector-General's returning to his post before these ships and guns are ready and despatched to China, and if any other circumstances, which we cannot here foresee, should arise, let the Inspector-General report thereupon to us himself, and recommend a person trustworthy in all respects to act in his room - so that, in respect of the arrangements subsequently made, the responsibility may be definitely fixed."

No. 2.
"AGREEMENT ENTERED INTO BETWEEN INSPECTOR-GENERAL. H.N. LAY AND CAPTAIN SHERARD OSBORN, R.N., C.B.

"London, Jan. 16,1863.

"The following conditions embody our mutual understanding:-
"'1. Osborn agrees to take the command of the European Chinese navy for a period of four years, and stipulates that there shall be no other European naval Commander-in-Chief.
"'2. Osborn, as Commander-in-chief, is to have entire control over all vessels of European construction, as well as native vessels manned with Europeans that maybe in the employ of the Emperor of China, or, under his authority, of the native guilds.
"'3. Lay will procure from the Emperor such an authority as may be necessary to cover Osborn's acts as the Commander-in-Chief of the European Chinese Navy.
"'4. Osborn undertakes to act upon all orders of the Emperor which may be conveyed direct to Lay, and Osborn engages not to attend to any orders conveyed through any other channel.
"'5. Lay, upon his part, engages to refuse to be the medium of any orders of the reasonableness of which he is not satisfied.
"'6. Osborn will appoint all officers and men on board the vessels of the force, subject, however, to the approval of Lay, as the representative of the Emperor.
"'7. Osborn's subordinates will not be at liberty to act without his permission, and Lay will not authorize his subordinates to call upon them to act without having first consulted Osborn and obtained the necessary order.
"'8. Lay and Osborn agree to carefully inquire into any complaints that maybe preferred against the officers and men employed in the force by Chinese officials.
"'9. The force being European, it is indispensable that the flag under which it acts should have an European character. First, to secure its own efficiency; secondly, to insure for it due respect in the eyes of the, foreign communities.
Lay, therefore, agrees that the flag shall be green with two yellow diagonal bands bearing in the centre a blue imperial dragon. Green is chosen because it is rarely used by European powers, and therefore not likely to be confounded with any other national colours.
"'10. Lay undertakes to procure from the Emperor, as soon as possible, a sum of money as a guarantee fund, to cover the pay and maintenance of the force for four years, and in the meantime it is understood that the vessels with their equipment will constitute the security for the just claims of the force.
"'11. In the event of the death of either Lay or Osborn, these conditions which are entered into with the authority of the Emperor of China are not, it is understood, in either case to be departed from.
"'12. The conditions of this understanding, the terms of the formal agreement, and the printed instructions, shall be formally ratified by the Emperor, at Pekin, before Osborn shall be called upon to act with the force under his command.
"'13. In the event of Osborn's death from disease, while in command of the force, Lay will recommend the Emperor of China to make some grant to his widow and children.

(Signed)
"'H.N.LAY.
"'SHERARD OSBORN.'

"Our motive for drawing up the above memorandum is that there may be hereafter no deviation from a plan of action, long deliberated and, decided upon by mutual consent.

"We have to deal with Asiatics prone to deceit and falsehood, ready to evade any engagement, directly it interferes with their views or momentary interests. We are about to afford them material military aid, and it behoves us to guard against its being misapplied, and thereby bring scandal upon ourselves and those who in Great Britain have promoted our views; above all we are to take care that the great power and proportionate responsibilities conferred upon us by Her Majesty's Order in Council be not abused by us, by our successors, or by the Chinese authorities.

"Clause 1.- This condition needs no explanation. It is made a sine qua non by Captain Osborn.
"Clause 2.- This we agree is most necessary. We are aware that for some time local Mandarins have been, without Imperial authority, purchasing vessels of European construction, arming them, placing crews of all nations in them, and giving over the command to British or American subjects selected by themselves. Lorchas or junks commanded by Europeans, half pirates, half privateers, are swarming in the Yangtsze.
"They claim in many cases to be men-of-war belonging to particular Mandarins, Guilds, or Hongs. It is the object of this force to extinguish all these dangerous freebooters. They should come under Imperial authority, without which no European has a shadow of right to levy war in China.
"Clause 3.- This is inserted to meet any objection that might be raised on the ground that Europeans are serving without commissions or direct authority from the Emperor.
"Clauses 4 and 5.- These are to meet the following difficult questions:- Is this squadron to carry on war in China upon a Chinese method? Through, what channel is Captain Osbore, unacquainted as he is with the language, to communicate with the Emperor or Regent? How shall he be protected against the charge of disobedience of orders? How are cruel or unjust orders from Pekin to be prevented? How shall European officers and seamen levy war for a barbarous Sovereign without being made to participate in acts which our country would repudiate? How shall the officers be protected from orders, the execution of which would involve breaches of international law or treaty rights?
"There is in our opinion no other way of meeting these difficulties than by arranging that, as Mr. Lay is to live in Pekin, and as the revenue which he collects is to be the guarantee for the maintenance of the force, he, as one well competent from a knowledge of the language and people should be the channel of inter-communication between the ruler of China and Captain Osborn, and that in the event of any order being at variance with law or justice, he should submit it to the European representatives, and, supported by them, decline to communicate it to Captain Osborn. The remaining clauses do not seem to us to need explanation."

No. 3.
"INSPECTOR-GENERAL H.N. LAY, C.B., TO CAPTAIN SHERARD OSBORN, R.N., C.B.

"Pekin, Sept. 25, 1863.

"Sir,- I beg to inclose for your information the translation of a letter to your address from the Prince of Kung, which was sent to me in July last, and to invite your attention to the marginal notes I have appended to it. From my remarks you will see that the Prince has not been quite accurate in making it appear that I had requested the appointment of a Chinese officer to command the steam fleet, or that I had consented that the fleet should be placed under the irresponsible authority of the local officials, as my letters to his Highness, which are upon record, show.

"I never gave more than a qualified assent to the rules with which he has furnished you. I accepted the money clauses, but those having reference to yourself and the fleet I told the Ministers plainly would have to be considered upon your arrival. The Prince doubtless thought that by declaring positively that these rules had been agreed to by me the chances of your offering any opposition to them would be diminished.

"I have. &c.,
"H.N. LAY."

No. 4.
"PRINCE KUNG'S LETTER OF INSTRUCTIONS TO CAPTAIN SHERARD OSBORN, R.N., C.B. (WITH MR. LAY'S MARGINAL NOTES).

"Pekin, July 8, 1863.

"His Imperial Highness the Prince of Kung issues these instructions to Osborn, the Assistant Commander-in-Chief of the Chinese steam navy.

"Whereas China, in view of the then unfinished military operations, did last year direct the Inspector-General of Customs, Lay, to purchase foreign steamers and guns for use in the fight and for the subjugation of the foe, and whereas the said Inspector-General has arrived at Pekin, and reports that the seven steamers and the storeship purchased will shortly arrive at Shanghai, and requesting the appointment of an officer to take the command, highly recommends the said Osborn, as having hitherto in England been zealous in the performance of his duties, of high military capacity, and being thoroughly versed in navy affairs, able to assist a high Chinese officer (This is not correct. So far from requesting that a Chinese should be appointed, I told the Ministers when they brought forward the proposition, that it was altogether out of the question. H.N.L.) in the management of such vessels, so that there may therefrom be expected a speedy sweeping away of the appearance of rebellion; and whereas I, the Prince, memorialized the Throne, requesting that the officer already, nominated by the Governor-General of the Two Keang and the Governor of Keang-soo might be appointed Chinese Commander-in-Chief of the Fleet, and that the said Osborn might be appointed Assistant Commander-in-Chief, and that the expenditure of the fleet should be controlled for a period of four years by the Inspector-General Lay; and whereas on the 23d of the 5th Moon (July 8) the Imperial edict was received, 'Let it be as proposed. Respect this.'

"Now, therefore, in addition to hurrying despatches to the Governor-General of the Two Keang and the Governor of Keang-soo, that they may at once order the Chinese Commander-in-Chief to repair to Shanghai with his officers and men, and take up his commission on board ship, it is further extremely proper to furnish the said Osborn with a copy of the agreement in five articles (The Prince chooses to assume that the rules were agreed to by me, while the fact is that I declared over and over again that assent to them was impossible, my most decided opinion being that to accent the terms proposed would be to court certain failure and discredit. H.N.L.), entered into between the Inspector-General Lay and the Foreign-office, and to appoint the said Osborn to be Assistant Commander-in-Chief, and to direct him, in accordance with the articles of the agreement, to co-operate with the Chinese Commander-in-Chief in the command of the fleet now commissioned.

"It is to be expected that the fleet will act with vigour against the enemy. The crews are to be kept under strict discipline, and not suffered to annoy the people, If trading vessels, whether Chinese or foreign, illegally engage in the carriage of munitions of war, they are to be seized and detained until receipt of orders from the Foreign-office. If there are pirates on the Chinese seas or rivers from time to time, no matter where the place may be, they are to be captured and destroyed, in order to the complete restoration of tranquillity.

"As regards smuggling and smuggling guilds at the ports on the coast and up the rivers, the fleet is authorized to take measures for the due repression of the same. The said Assistant Commander-in-Chief will, moreover, consider himself under the orders of the Governor-General of the Two Keang and the Governor of Keang-soo, and will take their instructions as to the disposal from time to time of his force.

"(Enclosure.)

"Five rules agreed upon respecting the steam fleet:-(I forwarded a translation of our agreement officially to the Prince, and in my covering letter called his special attention to the point embodied in that agreement - viz., that you would be under the orders of the Imperial Government at Pekin and the Imperial Government alone. His Highness "ignored" my letter, and up to this time has not acknowledged its receipt. Neither has he, I may add, approved the general agreement and. book of instructions, which shows (were other proof wanting) that he could not have been under the impression that the questions relative to the steam fleet were disposed of. H.N.L.)

"1. It has been settled that the post of Chinese Commander-in-Chief of the steam fleet now purchased shall be filled by the high officer selected by the Chinese Government, and that Captain Osborn, C.B., a British subject, shall be Assistant Commander-in-Chief for a period of four years. The affairs of the fleet are to be managed by the said Commanders-in-Chief in a friendly spirit of co-operation. While Captain Osborn assists the Chinese Government in the command of the fleet he will take the instructions of the Governors-General and Governors as to the employment or distribution of the force. In all operations he is always to confer personally with those officers before either undertaking or staying these, and is to accept the Chinese decision as final. (These conditions would practically place you under the orders of the lowest officer on the staff of either of the officials named. Prince Kung has seen that our military officers will act under Taoutais and Foutais, and hence it has occurred to him that if you could be persuaded to occupy a. similar position the Imperial Government would be relieved of all trouble and responsibility. I have told the Ministers that I would rather see the force disbanded and the ships sold than consent, to such a proposition: there can be but one naval Commander-in-Chief, yourself, and but one master, the Imperial Government. H.N.L.)

"2. Captain Osborn, in the capacity of Assistant-Commander-in-Chief to the Chinese Government, will receive a commission from the Foreign-office giving him the requisite powers. The foreign crews will be duly controlled by him; and in the event of any individual injuring the people or acting in a lawless manner, Captain Osborn will exercise due severity in the punishment of the same, in order to the sustaining of proper discipline.

"3. In order to the insuring of beneficial results from the fleet now purchased by the Chinese Government, Chinese sailors, as time and circumstances will permit, ought to be chosen for service on board the steamers, in order that they may become experienced, and that long continued practice may prevent them from forgetting their duties and thereby rendering the fleet useless. The working of the ships and the management of the guns and other arms Captain Osborn and the other commanders will exert themselves to teach to such sailors, in order that they may attain a real acquaintance with the same.

"4. It is agreed that for the support of the fleet, consisting of seven steamers and one storeship, there shall be appropriated the monthly sum of 75,000 taels. This amount is to cover the expense of salaries, wages, rations, ammunition, coals, rewards, compensations, as well as every other possible and, at the present time, impossible-to-be-indicated expenditure. The control of the expenditure is confided to the Inspector-General Lay. The office of Customs at Shanghai will provide 10,000 taels monthly, the Kiukiang Customs will provide 10,000 taels monthly, the Foochow Customs will provide 34,000 taels monthly, the Amoy Customs will provide 6,000 taels monthly, the Canton Customs will provide 10,000 taels monthly, and the Swatow Customs will provide 5,000 taels monthly. In all will be provided monthly the sum of 75.000 taels, which in the proportions above mentioned will be received from each office of Customs by Mr. Lay monthly. Every three months Mr. Lay will send in an account of the expenditure to the Foreign office, which, in turn, will communicate the same to the Board of Revenue. Should there be any surplus money, Mr. Lay will retain it for future use.

"5. From the 27th day or the 6th moon - that is, from the 1st day of August, it will be the duty of each of the said officers of Customs to hand over in full, before making any other appropriations from the duties received, the monthly sum fixed on to the person appointed by the Inspector-General Lay to attend at the bank to receive the same. In the event of the money not being forthcoming, the Inspector-General Lay will at once proceed to deduct the same from the duties. For a period of four years, and for each month during that period, this rule is to be in force."

No. 5.
"CAPTAIN OSBORN'S REMARKS UPON PRINCE KUNG'S LETTER OF INSTRUCTIONS.

"Pekin, Sept 28,1863.

"In the first place, these instructions are in direct contravention of my formal agreement with Mr. Lay, which runs to the following effect:-
"That I was to be Commander-in-Chief of the European Chinese Navy, with entire control over all vessels of European construction as well as native craft manned with Europeans in the employ of the Emperor of China, or under his authority, in the employ of natives, and I was to have an authority from the Emperor to cover my acts as the Commander-in-Chief of the European-Chinese Navy. On the other hand, I bound myself to act upon all orders from the Emperor conveyed through Mr. Lay, and not to attend to those delivered through any other source.

"A copy of this agreement was furnished to the Prince, yet, in spite of it, and, indeed, ignoring it entirely (for I am told he has not even acknowledged the document), the Prince sends me orders to place myself and my people under the authority of the Foutai [provincial governor-general] Lé, as well as that of no less than three other provincial authorities. Prince Kung acknowledges that the appointment of Commander-in-Chief of my force was filled up by the Governor-General of Keang-soo, and merely confirmed by the Emperor; and, farther, he (Prince Kung) directs the said Chinese Commander-in-Chief to repair on board a ship at Shanghai. This would virtually suspend me from the post I at present hold, by virtue of a temporary commission granted me by the Inspector-General, Mr. Lay, upon the authority of Prince Kung's instructions and promises of last year.

"Apart from the conclusions which Mr. Lay has arrived at as to the want of good faith displayed in the document before me, my own suspicions are aroused by the crafty wording of its contents. In one paragraph l am superseded, and have, apart from the Emperor, Prince Kung, and the Board called the Chinese Foreign-office, all provincial high officers placed over me; in another I am enjoined to act in a friendly spirit of co-operation with my superiors, and this is immediately followed by a carefully worded sentence, in which I am distinctly warned that the distribution of the force will be dependent upon the whim of the governors and governors-general of the provinces, that I am to follow their instructions in all things, and, as the original document runs, I am 'not to act, advance, retire, or remain stationary without conferring with those dignitaries, and to consider their decision as final.'

"Mr. Lay says very justly in his marginal notes that these conditions would practically place me under the orders of the lowest officer on the staff of either of the officials named.

"I have no intention of submitting to such terms, and for the following reasons:-
"1. Naval operations for the suppression of all the disorders enumerated in the Prince's orders could not be successful, fettered as I should be under such a system. It may be the Chinese system; if so, it explains their unfitness for war or naval operation.
"2. I came here to serve the Emperor, and under him the Regent, not to be the servant of mere provincial authorities. On that point I stand distinctly upon the terms of my agreement.
"3. The officers and men of the force were entered under a specific agreement to serve me as Commander-in-Chief. Directly a Chinese officer steps in as my superior in that force the agreement is null and void, and without it all law and order would cease and my power be at an end.
"4. By submitting to such instructions and violation of my original agreement I should at once deprive myself of the power to assist in carrying out in China the policy of Western civilisation. My force, powerful as it will be for good or evil, might be directed against the interests of commerce or of common humanity. Brutal butchery might be perpetrated, and I should be powerless to prevent it. My men and officers, the pick of many from the Royal Navy of England, would be associated upon equal terms with the rowdies and pirates the Foutai might be pleased to employ.
"My power to restrain my own men within the bounds of ordinary discipline would be nil, and the European-Chinese force, instead of being a blessing, would become a curse to the Chinese people and to the best interests of Europe in this empire.
"5. If I was weak enough to forget what is due to my own position, and attempted to act upon such instructions, I am certain that I should come to a dead-lock with the provincial authorities within a month, exactly as is at present the case with Major Gordon, R.E. He is insulted by his Chinese superior, the pay of his men suddenly stopped at the will of the Foutai, he is called upon to attempt impossibilities and deprived of adequate forces, and he has again, for the second time, virtually resigned office as the military coadjutor of the Foutai. Yet they wish me to be 'the naval assistant of such a Mandarin.'
"6. To the argument advanced by the Chinese Foreign office 'that the course proposed by Prince Kung is a usual one in China,' I reply I did not come here, or my followers either, to accustom ourselves to the treatment usual with Chinese sailors or soldiers, or to assist them its a retrogressive policy in the treatment of European employés or Europeans in general. The employment of ships of war and war steamers of European construction is an innovation, that of European officers and gentlemen still more so. I and my force are part and parcel of a new order of things indicating 'progress in China.' I will be no party to her lapsing back into her ancient system and treating Europeans as if they were Chinamen.

"European commerce in China, and consequent intercourse, is a departure from all foregone customs.

"The presence of Europeans at the open ports is the same.

"The residence of European Legations in Pekin strikes at the root of China's most ancient prejudices.

"The entire responsibility of the conduct of the provincial authorities towards our merchants and missionaries being forced upon the Ministers at Pekin is another departure from the most cherished institutions of these people.

"I merely claim for the European force under my command another stride in the same wise direction, and I will not, on all the foregone grounds, depart from a line of policy decided upon by Mr. Lay and myself after long an careful discussion - a line of conduct approved, I am sure by my countrymen and profession, and which. I see more and more reason not to swerve from since I have noted the present bearing of the Pekinese authorities towards foreigners.

"I may add in general terms that if I required any confirmation of my opinion of the utter impossibility of serving the Chinese Government upon the terms the Prince suggests, I should find ample grounds in my own experiences while at Shanghai, as well as in the information. General Brown gives me of Major Gordon's present position. I found on my arrival at Shanghai that the Foutai's agents had tampered with the crews of the vessels under my orders. They were told that the Foutai would give them higher wages than those I engaged them at, that they would all be made officers, and that the discipline existing among the Europeans in his steamers was far pleasanter than the order I enforced. Puzzled to find such a different system existing in what was called the Imperial service, the men became naturally disaffected and anxious to leave me to join the Europeans employed by the Foutai; and to enable them to do so without prejudice to their pockets I found they were actually offered 12 l. a head bounty, the money to be lodged in the names of the deserters in an English bank. I had to discharge 14 men, and was detained several day at Shanghai in consequence. It was no fault of the Foutai's that I was not detained there altogether.

"Foutai Lé is an able Chinaman, and as unprincipled as all Chinese officials. His plan, would be to render me powerless, and then to use or toss me aside, just as he does all European leaders in his force. He is a civilian by education, ruling over military and naval affairs without the slightest knowledge of either. He is squandering the revenue of the province as well as that derived from European trade, and is in league with unprincipled traders in Shanghai. Although he can procure from the British stores all such military supplies as he can require, he is encouraging the import of munitions of war by private firms, and granting permits to land the same in spite of all our proclamations against the importation by foreigners of goods contraband of war. Having secured the services of an excellent officer in Major Gordon, who appears to have entered his service, not that of the Emperor of China (for he holds no authority from the latter), Foutai Lé proceeds to render him powerless, and to hamper his action in two ways - first, by depriving him of the means to carry out any decisive measures; and next, by placing in exactly similar positions a number of other Europeans, and playing one off against the other. Major Gordon wishes to attack Sonehow-foo, and asks for 100 Europeans. The Fontai agrees, but says the 100 men must only be entered for one month. Gordon declines to enter into any such arrangement, seeing its injustice and folly. The Foutai insults him by questioning his desire to fight the rebels, and proposes that the assaulting column shall he formed of all the European officers in his employ, and that over their bodies the Chinese would advance to victory.

"Again, what faith can I have in any mandarin's listening to my advice as a subordinate, when I am told, by General Brown, Commander-in-Chief of our military forces in China, and the superior of the Foutai, that he will listen to no advice or suggestion the General offers; that be purposely avoids all conference with him; and when an interview is sought by General Brown insolently replies that he is too busy to see him? and be it remembered that Foutai Lé is not a bit more unreasonable than other mandarins, and that he is an average specimen of his class.

"SHERARD OSBORN."

No. 6.
"INSPECTOR-GENERAL H.N. LAY, C.B., TO CAPTAIN SHERARD OSBORN, R.N., C.B.

"Pekin, Oct. 13, 1863.

"Sir,- I regret to say that at an interview which I had to-day by appointment with the President of the foreign-office, Wansiang, he requested me to intimate to you that the Prince of Kung would decline to ratify the Agreements entered into by us under his letter of instructions of October, 1862.

"I have, &c.,
"H.N. Lay."

No. 7.
CAPTAIN SHERARD OSBORN, R.N., C.B., TO THE PRINCE OF KUNG.

"Pekin. Oct. 15, 1863.

"Your Royal Highness,- I have the honour to request that you will be pleased to furnish me officially, and in writing, with your decision relative to the agreements entered into between your agent, Mr. Horatio N. Lay, C.B., Inspector-General, and myself.

"The Inspector-General informs me that after a delay of four months and a half, during which time your Royal Highness has neither acknowledged a single letter nor referred to the agreements, Wansiang informed him formally that you intended to adhere to your manifest intention of ignoring all such agreements, as evinced in your instructions already addressed to me.

"I may remind you that I have now been three weeks in Pekin fruitlessly endeavouring to point out to the members of your Foreign-office, through Mr. Lay, that your instructions to me are entirely contrary to the understanding under which Her British Majesty's Government permitted myself and others to agree to serve the Emperor of China, and that I declined to act except upon the terms explicitly laid down in our agreements.

"To all these representations no attention has been paid.

"I therefore avail myself of this opportunity to remind you of the circumstances under which the force I command has been placed at your disposal. Last year (1862) you applied in an unofficial form to the British Minister of Legation in Pekin for assistance to procure men-of-war of an European construction; you were recommended to employ your own official, the Inspector-General, as the best agent. You set aside a large sum of money; you ordered the vessels, and you gave instructions to both Mr. Hart and Mr. Lay to procure not only ships, but proper officers and men to fight and manage them; and, lastly, you furnished your Inspector-General with a formal authority to enter into all such agreements as he might think necessary to carry out the object you had in view. Upon the strength of that authority to your agent, and supported as your wishes were by the official representations of his Excellency Sir F. Bruce, Her Majesty's Government were pleased to suspend in favour of China the Neutrality Act, and the Admiralty of Great Britain granted me and other officers permission to serve the Emperor of China for a stated period, and every assistance was given by all departments to aid the Emperor to carry out the wishes expressed in your instructions to Mr. Lay.

"The Inspector-General laving satisfied me that the powers you had given him were ample, I entered into certain agreements with him, subject to your ratification as Regent of China. It only remains for me to say that my power to maintain, order and discipline in the force is now at an end, and that if I do not receive a favourable reply within 48 hours it will be necessary to immediately disband the force.

"I have, &c.,
"SHERARD OSBORN."

No. 8.
CAPTAIN SHERARD OSBORN, R.N., C.B., TO HIS EXCELLENCY SIR F. BRUCE, K.C.B., &C.

"Pekin, Oct. 19, 1863.

"Your Excellency,- Prince Kung having failed to ratify the agreements entered into between Inspector-General H.N. Lay, C.B., and myself, it becomes necessary for me to disband the European-Chinese naval force.

"I have the honour to enclose you copies of the agreements in question, as well as all correspondence, and to request you will inform me whether yon see any objection to my surrendering to Prince Kung the eight ships which I have brought out to this country. They are Imperial property, and I have no right to detain them; but I would submit that there might be some danger if vessels of so formidable a character were trusted to the rowdies and pirates now so numerous in Shanghai, and who, I dare say, are quite ready to serve the provincial authorities without agreements or guarantees.

"Directly I receive your Excellency's official instructions upon that point I shall, in conjunction with Mr. Lay, proceed to dissolve the force, sending the officers and men to England in detachments, and reporting all the circumstances to the Lords Commissioners of the Admiralty, and sending them an exact description of the ships if you decide upon not surrendering them.

"SHERARD OSBORN."

No. 9.
HIS EXCELLENCY SIR F. BRUCE, K.C.B., TO CAPTAIN SHERARD OSBORN, R.N., C.B.

"British Legation, Pekin, Oct. 30, 1863.

"Sir,- I have received your letter with its enclosures, informing me of the refusal of the Prince of Kung to ratify the agreements entered into by his agent Mr. Lay, and yourself, and of your consequent resolution to disband the force.

"I have informed His Imperial Highness of my conviction that Her Majesty's Government would not have consented to the organization of this powerful squadron had it not been on the understanding that it was to be placed under the orders of an officer, in whose prudence and high character they had full confidence; and that I will not consent to the ships and stores being handed over to the Chinese Government without instructions to that effect from Her Majesty's Government.

"I, therefore, request you to take measures for keeping them in deposit until the pleasure of Her Majesty's Government be known.

"I am, &c,
"FREDERICK W.A. BRUCE"'

No. 10.
CAPTAIN SHERARD OSBORN, R.N., C.B., TO HIS EXCELLENCY SIR F. BRUCE, K.C.B.

"Pekin, Oct 27, 1853.

"Sir,- Consequent upon the receipt of your Excellency's letter of the 20th inst, in which you acquaint me you will not consent to the surrender of the ships and stores to the Emperor of China; and desire me to take measures for keeping them in deposit until the pleasure of Her Majesty's Government shall be known, the following questions have arisen in my mind, upon which I solicit your early instructions :-
"1. If the Emperor of China should repudiate the arrangements recently sanctioned for the regular payment of this force, what steps am I to take to avoid selling the ships and stores according to the 10th article of my agreement? As Prince Kung has already repudiated his former instructions to Mr. Lay, I am compelled to anticipate the probability of his treating all his engagements in the same fashion.
"2. Where shall I procure funds for the maintenance of the force, pending the orders of Her Majesty's Government?

I have, &c.,
"SHERARD OSBORN."

No. 11.
HIS EXCELLENCY SIR F. BRUCE, K.C.B., TO CAPTAIN SHERARD OSBORN, R.N., C.B.

"Pekin, Nov.6, 1863.

"Sir,- As you are aware, the scheme of keeping the ships of the flotilla in deposit, awaiting instructions from Her Majesty's Government has been abandoned, and the Chinese Government has requested me to send the vessels to England to be disposed of. Has Imperial Highness expresses his thanks to yourself for the trouble to which you have been put in procuring the fleet and in bringing it out to China, and requests you to accept 10,000 taels in addition to your pay for the labour entailed upon you by it.

"He further requests that the ships may be put under another flag. That, however, is a point which must be left to your discretion. I have, therefore, to request that you will take charge of the vessels and men, with a view to the disposal of the former in England or in India, as you think best. The officers and men to be sent home and to be paid up to their arrival in England.

"But as the contract may be construed to give them a claim for pay for three months after their arrival, or up to the 30th of August, it will be advisable to obtain the opinion of counsel as to the liability of the Chinese Government, they having declined to accept the flotilla, on the ground of their agent having exceeded his authority in the conditions attached to the scheme, you will feel with me that our honour is involved in winding up this affair on terms as little onerous as possible to the Chinese Government. I will give instructions to the consuls to contribute what may be required, out of the moneys received by them on the indemnity account, to meet such part of the expenses of sending the vessels home as the Chinese Government is unable to provide for. The sum, so advanced, will form a lieu on the ships and to be deducted from the expenses of sale, or set-off against the ships and stores, should Her Majesty's Government decide on taking any of them back.

"I think it but just to you to express my entire approbation of the honourable and dignified course you have pursued daring the discussion of the question at Pekin. An officer more alive to pecuniary advantages, less scrupulous as to the interests of Great Britain, and less careful of his own honour, might have admitted some unsatisfactory compromise as to his position, and might have trusted to an arbitrary exercise of the power wielded by him to have extricated himself from future embarrassments. By your firmness you have saved Great Britain from complications, and you have vindicated the honour of the British uniform in the eyes of the Chinese by refusing to accept an unbecoming position. However disappointing the result of your honourable wish to advance the cause of progress in China, you have the consolation of knowing that you have gained the respect and approval of persons of every nation who are acquainted with the course you have pursued.

"I am, Sir, your obedient, humble servant,
"FREDERICK W. A. BRUCE."

(GENERAL MEMORANDUM.)

"Tien-tsin, Nov. 9, 1863.

"I have with great regret to inform the officers, seamen, and marines under my command that it has become necessary to send them to England in consequence of the Emperor of China having refused to ratify the agreement entered into between myself and his agent, Inspector-General H.N. Lay, C.B., upon the faith of the Prince Regent's instructions.

"The Emperor wished to place the entire control and disposition of the squadron under the irresponsible authority of the provincial mandarins, and to supersede me as Commander-in-Chief, leaving it to the local mandarins to form as many squadrons of European vessels as they might see fit, under different officers and under different systems of pay and discipline.

"Were I to accept such a position for this force and thus take service under provincial and subordinate Chinese officials, instead of under the Emperor of China, I should violate the spirit and word of Her Most Gracious Majesty's Order in Council, and act in disregard of the wishes of Her Majesty's Government, forgetful of every pledge I gave before I undertook the organization of the squadron.

"To surrender ourselves to the irresponsible orders of local mandarins would certainly make us participators in acts of plunder and cruelty, which would bring disgrace upon us as British officers and seamen.

"I have, therefore, had no hesitation in refusing to depart from the terms laid down long before we left England.

"Provided the crews continue to conform to the rules and regulations of their agreement, they will be kept upon full pay until their arrival in England, and receive whatever further sum they may be justly entitled to under its conditions.

"It only remains for me to cordially thank the captains, commanders, officers, seamen, and marines of the squadron for their hearty support and excellent conduct during the time the vessels have been in commission, and to wish then a pleasant and speedy passage to their homes.

"SHERARD OSBORN, Captain, Royal Navy."

"Cheefoo, Nov. 14, 1863.

"Sir,- We, the captains and commanders of the European-Chinese navy, consider it but just to you to state formally that the course you have deemed right to pursue, in disbanding the said force, has only served to strengthen those feelings of reliance and respect which induced us to take service under you.
And, farther, that by your firmness with the Chinese Government in refusing to act under any other authority than that of the Emperor himself, you have saved us from an essentially false position, one which could only have been as repugnant to our own feelings as it would have been to yours.

"We are, Sir, your most obedient servants,
"HUGH T. BURGOYNE, V.C., Pekin.
C.S. FORBES, Keangsoo.
S. MORIARTY, Ballarat.
NOEL OSBORN, China.
ALLEN YOUNG, Quantung.
G.B. NICHOLAS, Tien-tsin.
D. CRUIKSHANK, Thule.

CHINA
(From our own Correspondent.)

Shanghai, Dec. 9.

The failure of the attempt to provide China with an efficient fleet is complete. Mr. Lay's resignation or dismissal, it does not seem quite clear which, has followed closely on Captain Osborn's departure; the greater portion of the fleet has left for England or India, and the remainder starts in the course of a few days. Different accounts are given of the causes which led to this unfortunate end to a scheme which had been so highly lauded by its originators.

HOUSE OF COMMONS, Monday, Feb 8.

Lord NAAS inquired of the Under Secretary for Foreign Affairs whether any despatches had been received during the recess from Sir Frederick Bruce relative to the state of affairs in China; and whether the Government had received any official accounts of the proceedings of the Chinese force under the command of Major Gordon, of the Royal Engineers; and, if so, whether he would lay them upon the table of the House; also, whether he would lay upon the table all the documents in possession of the Government relative to the dismissal of Mr. Lay from the service of the Emperor of China and the withdrawal from the Chinese waters of the fleet lately under the command of Captain Sherard Osborn, of the Royal Navy.

Mr. LAYARD said that papers on the affairs of China, in continuation of those laid on the table last year, would shortly be produced. The Government had no official information of the dismissal of Mr. Lay, and consequently no papers upon the subject. There would be no objection to produce the documents relating to the withdrawal of Captain Osborn's fleet.

CHINA.
(From our own Correspondent.)

SHANGHAI, Jan. 8.

In relating the treachery of the Futai towards the rebel chiefs after they had surrendered Soochow, I ventured to predict that the mere fact of his success would be held at Pekin to entitle him to high praise, without regard to the means by which that success was attained. In effect, Prince Kung lost no time in testifying his approbation. Soo-chow capitulated on the 5th, and a despatch announcing the fact was sent the same night by courier to Pekin. It arrived on the 13th, and on the 14th a congratulatory reply was returned, conferring on him the yellow jacket, one of the highest honorary distinctions in the empire, nearly answering in character to the English Grand Cross of the Bath. At the time this despatch was penned, however, General Brown's despatches to Sir Frederick Bruce had not even left Shanghai: so it is still possible that when Prince Kung becomes aware of the complications caused by the Futai's breach of faith, he may alter his opinion as to the latter's merits. That he will blame him for his treachery I do not in the least anticipate; but it is quite possible he may be angry at his political blunder in aggravating the English, and so losing the aid of important auxiliaries. Whether he will even take this view of the matter, however, depends on the value which he attaches to foreign aid under present circumstances. If it be true, as asserted, that a report which reached Pekin that Burgevine had been captured by the Amoy mainly influenced him in his determination to dispense with Sherard Osborn's fleet, on the ground that one principal danger of the rebellion had been removed, it is quite possible that he may consider the frequent defeats the rebels have recently sustained, and the loss of one of their most important cities, must have so far crippled them, that foreign aid can in future be dispensed with by land as well as water. If he takes this view he will prefer the alternative of Gordon's resignation to that of removing a high official whom he regards as a successful Governor, and who is moreover a friend and protégé of Tsan-kwo-fan, Governor-General of the two Kiangs and one of the most influential mandarins in the empire.

HOUSE OF COMMONS, Friday, Feb. 26.
THE ANGLO-CHINESE FLEET.

Colonel SYKES asked the Secretary to the Admiralty whether the Africa, of four guns and 150-horse power, built in Her Majesty's Dockyard, at Devonport, and launched on the 20th of March, 1862, was sold to the Chinese Government; for what sum, and whether that sum had been paid; whether any other of Her Majesty's vessels had been sold to the Chinese Government; for what sums; whether the prices had been paid; and whether any moneys were due, and the amount, from the Chinese Government on account of vessels sold, or for the supply of warlike or naval stores to the so-called Anglo-Chinese fleet lately under the command of Captain Sherard Osborn, C.B., R.N.; and when the ship's books of Her Majesty's ship Encounter were likely to be received at the Admiralty. He farther wished to know whether the prices obtained from the Chinese Government exceeded or fell short of the cost prices of the ships.

Lord C. PAGET said the purchase-money of the Africa had been fully paid, and likewise that of the Jasper and Mohawk. The stores supplied had also been paid for. In the books of the Accountant General, however, there was a sum of 776 l. 7 s. 6 d. Still remaining due to the public for stores supplied to that expedition, and the Accountant-General believed that a further small sum would arise for stores supplied to the squadron after their arrival in Chinese waters. Captain Sherard Osborn had called upon him that day, and he had undertaken to state on his behalf that the debt of the Chinese Government would amount to about 100 l. When the Admiralty had paid Captain S. Osborn for certain stores supplied by him before he left to the senior officer of the navy in China. Everybody knew that it was very costly to send out stores to China, and it was therefore a matter of good policy and economy to purchase the stores out there at their original price. After balancing accounts there would remain, as he had said, a sum of 100 l. Due by the Chinese Government, and he had every reason to believe it would be paid. As to the latter part of the question, the ship's books of the Encounter were now in the office, as far as they ought to be, until the ship was paid off; and his gallant friend by applying to the Accountant-General could have any extracts from them printed which he thought necessary.

Colonel SYKES said the noble lord had not stated whether he got the cost price of the ships from the Chinese Government.

Lord C. PAGET replied that the ships were sold at a valuation. They were disposed of for their real value at the time, just as they would be to any private individual.

Colonel SYKES.- At a loss. (Laughter.)

THE ANGLO-CHINESE FLEET.

On the 9th of February a motion was made in the House of Commons for the production of the correspondence relating to the fitting out, despatching to China, and ultimate withdrawal of the Anglo-Chinese fleet, under the command of Captain S. Osborn. The papers have been published, but they do not add many important facts to those already known. Indeed, the greater number of the despatches and enclosures, no less than 15, dated from August, 1862, to the end of November last, refer exclusively to one preliminary point, the selection of a flag for the new naval force. It appears to have presented some difficulties, not only as to the selection, but as to the approval of the Chinese Government, and the notification in the London Gazette. The Anglo-Chinese Fleet has no intermediate history between the settlement of the flag question and the dissolution of the whole force. The last communication on the former point is dated April 22, 1863; and in the next document in order of time Captain Osborn announces the dissolution of the force under his command. All the transactions connected with the fitting out of the fleet took place in England. The intelligence of the arrival of the ships in China and the announcement that it could not render any efficient service under the conditions required by the Chinese Government reached this country almost simultaneously. All the interest of the correspondence, therefore, is confined to the differences in China which neutralized the aid intended to be given, and those differences have been already described.