all requirements. The fact is that mining and the manufacturing of ships and guns always go together. Now, as a minister plenipotentiary for coast defense is to be appointed, all guns, ships, mines, foundries, and ammunitions should be placed under his sole management; for thus duties can be performed in a more expeditious manner. The memorialist proposes to request the throne, as soon as a proper man is appointed to be minister of board of marine, to abolish the office of high commissioner in the Foochow arsenal, and to allow the minister to select a man to fill the post in the arsenal with the approval of their majesties. The arsenals of the other provinces are also to be under the minister's general direction, so that there may be uniformity in every measure set on foot.

V. Funds must be generally devised. The memorialist perceives that in forming the naval squadrons the expenses necessary must be enormous. The yearly expenditure will be about three or four millions.* Now, our treasury is in an embarrassed condition, and unless all China exert itself to bring forth its combined resources it is im- . possible to carry out the plan. The first method of devising funds is to reduce the army. If we decrease the regular army by six-tenths several millions can be gained. If one-tenth of the funds for recruiting soldiers were reserved it would bring in hundreds of thousands. Moreover, taxes on foreign goods (?) or opium (?) can be increased, and gun-junks along the coast can be done away with. This increase on the one hand and abolition on the other will result in procuring hundreds of thousands-even millions. May it please their majesties to instruct the boards of revenue and war to find out what are the present income and expenses, and what these would be after the reductions in the different branches of service are made, and how much funds can be devised thus, so that the yearly expenses for administration of the coast defense may be fixed, which sums should be considered as the revenue of the board, and no province be permitted to be short in its remittance. The various provinces in yearly subsidizing the arsenals and in purchasing foreign goods and foreign materials (for military and naval purposes) expend several tens of thousands. Whatever can be economized out of these every year should be handed over to the minister of the board of marine, who is to render an account of his expenditures to the throne.

VI. Railroads must be modeled and built. In foreign countries trade is the backbone of the state, and China is different from them in condition and circumstances. But railroads are built by the merchants; military movements are benefited by the roads. Transportation is facilitated and made expeditious, and wherever the railroad extends there benefits accrue. Before the railroads were made many hindrances were thrown in their path, but when once they came into existence the people on that account grew rich, countries became powerful, and goods imported were multiplied. That there is every advantage and no detriment is only too obvious. The comments of the masses are multifarious, but there is no necessity to argue with them and explain everything. As the Analects have it, "The people can be made to follow, but cannot be convinced." Take, for instance, the telegraph and steam navigation, things China never had before; yet once they are initiated they become indispensable. If railways are introduced the benfits that will be derived are of still wider scope. The memorialist is of the opinion that the first railroad should be laid from Tungchow to Tsing-kiang-pu, so as to connect the pivots of the north and south. Transportation being made easy, the trade will become brisk; military movements being rendered expeditious, the army may be reduced to a great degree. Besides, the cost of the road is only several millions. If shares are purchased by mandarins and merchants to make this read as an experiment, the plan can be carried into execution. Moreover, it interferes in no respect with the country, or the livelihood of the people. When this road is a success it can be extended. A railroad for the northwest is especially inevitable in the future. The memorialist proposes that as soon as the minister for the board of marine is appointed he is to be instructed to deliberate upon the subject, to devise methods for raising funds, to draw up proposals for carrying the plan into execution, and finally to report everything to the throne.

VII. The ambition of the students must be encouraged. The Government, in selecting students, considers of the first importance morals and accomplishments; for morals are the motive principle, and accomplishments are for action. In the year previous Pan Yen-tung memorialized the throne to start a special examination for students who study arts and crafts, and the memorialists, obeying a decree, deliberated in unison [with Pan] and framed a circular to the effect that [Confucian] doctrine and arts or crafts are from the same origin and cannot be separated into two different objects; so that able and talented men are to be had even among those who pursue the latter studies. Now, the memorialist, having some personal experience in seaboard affairs, and having made minute inquiries in all matters, is of the idea that not only such a college as the one proposed by Li Hung-chang, where naval and military men * i. e., from $3,750,000 to $6,000,000.

On the Pei-ho, 13 miles southeast of Peking, with which it is connected by a canal. On the Yang-tze, near Chinkiang. (?)

can study polytechnics, manufactures, geography, and laws, so as to combine morals with accomplishments, should be opened, but it is also necessary to start a Government school and to frame regulations in accordance with which scholars may be enabled to advance themselves. Foreign books are to be translated and carefully written out. The students and people are to be instructed so that they can teach each other. Then ability and talent will be inexhaustible. The best methods to be adopted to carry out this project will be proposed by the minister plenipotentiary fer coast defense.

The memorialist humbly awaits the imperial decision on these seven propositions.

No. 34.]

No. 120.

Mr. Denby to Mr. Bayard.

LEGATION OF THE UNITED STATES,

Peking, November 5, 1885. (Received December 26.) SIR: I have the honor to state, as a matter of interest to a great many persons in the United States, and as part of the current history of China, the position of that Empire as to the construction of railroads. The most prominent man in China to-day is Li Hung-chang, who is grand secretary of the Empire, viceroy of the province, and one of the heads of the admiralty board. His residence is at Tien-Tsin, but he lately spent some weeks at Peking. I had the pleasure of meeting him on several occasions. He seems to have great respect for foreigners. He has for some years been in favor of building railroads. He has had a hard fight in China to have his views approved. The opposition comes chiefly from the censors and the board of revenue. The censors represent that numbers of men would be thrown out of employment, graves would be desecrated, and internal troubles would ensue. The board of revenue claims that if railroads are built the whole revenue service of China would have to be changed. It seems likely in effect that the lekin tax, which is one of the chief sources of revenue to China, would have to be abandoned or materially modified. This is a consummation that the foreigners most ardently desire. The viceroys generally oppose railroads because they tend to centralization of power, and thereby diminish their own influence. But Li Hung-chang, through all the changes of men and measures, has maintained his power, and there seems every reason to believe that he will succeed in his plan of constructing railroads.

I send to the Department the dying memorial of Tso Tsung Tang, which contains an able presentation of the argument in favor of constructing railroads in China. By way of parenthesis I will state that a dying official always leaves a posthumous memorial to the Government. It also happens often that after he is dead some distinguished honorary office is conferred on him by imperial decree. This memorial of Tso Tsung Tang preceded by a very few days the visit of Li Hung. chang to the capital, and furnished him a fine opportunity to press his railroad views.

It was considered, certainly with reason, that the best mode of inviting the attention of the members of the Government to the merits of railroads would be to exhibit a working model of an American roadway and rolling stock. The Chinese are eminently a practical people and without much scientific knowledge; therefore an actual ocular demonstration of the thing proposed is the surest and easiest mode of carrying conviction to their minds.

Acting upon this peculiarity, a complete working model railroad was procured from the United States. It consisted of 100 feet of main track and sidings, with switches and turn-table, a passenger locomotive and tender, mail and baggage cars, passenger cars, Pullman parlor and sleeping cars, different kinds of freight cars, a full section of seats and berths in sleeping-car, &c. The cars were 5 feet long, and all other parts of the model were in equal proportion, and care had been taken to make the model throughout an exact representation in miniature of road, locomotive, cars, &c., in actual use in the United States, complete in the smallest detail. The motive power was clock-work. This model was exhibited to the viceroy, Li Hung Chang in his yamên at Tien-Tsin, in September last, and he expressed himself much pleased with it, and said he would exhibit it in Peking when he went there in October.

On the 16th of October the model, which had been conveyed to Peking, was again exhibited before the viceroy by his order, and on the following day the viceroy presented it to Prince Chün, the Emperor's father. Several native mechanics who were able to work the model went with it to the prince's palace and worked it successfully in the pleasure grounds of the palace. The prince was highly pleased and thanked the viceroy heartily. He also gave presents to the mechanics and had them instruct his own attendants in the working of the model. Two days later the prince sent the model to the imperial palace, where it was exhibited to the Emperor and Empress dowager, and worked successfully. Their majesties were much interested and amused, and spent some time in a minute examination of the model. It was the first and most complete representation they had ever seen of the much-talked-of railroad, and it enabled them and the prince to realize many of the benefits that this modern institution would confer on China. It is understood that the event materially assisted the viceroy in his advocacy of railroads for China, and their majesties lent a willing ear to all he had to say in favor of railroads, and agreed to allow him to prepare for their introduction into the country.

It is to be hoped that this good result will be followed by measures favorable to the adoption of our system of railroads in various parts of this vast Empire. There are many ways in which our system is peculiarly adapted to China, and it may be expected that the enterprise and skill of our engineers and manufacturers will find profitable field for employment in China, and furnish men and material fitted to sustain the high reputation of our railroads and their management.

I have, &c.,

CHARLES DENBY.

CORRESPONDENCE WITH THE LEGATION OF CHINA AT WASHINGTON.

No. 121.

Mr. Bayard to Mr. Cheng Tsao Ju.

DEPARTMENT OF STATE,
Washington, April 24, 1885.

SIR: I have the honor to inform you that by an act of Congress approved March 3, 1885, the President was directed to cause the sum of $583,400.90 to be paid to the Chinese Government out of the residue of

the indemnity received by the United States from China in pursuance of the claims convention of 1858; provided that before the payment to China the Secretary of State should pay to the executors of Charles E. Hill the sum of $130,000, upon receipt of a release in full for all claims upon China for the use and loss of the steamer Keorgeor, in or about the year 1863.

This latter prescription of the law having been complied with, the President desires me to now pay over to China the sum of $453,400.90, this being the remainder of the sum of $583,400.99, after deducting the payment of $130,000 to the executors of Charles E. Hill.

Having been advised by the chargé d'affaires of the United States at Peking that it is the wish of His Imperial Majesty's Government that your excellency shall be the recipient of this payment, it gives me great pleasure now to proceed with you to the fulfillment of the provisions of law and the wishes of the President and His Imperial Majesty's Government. For this purpose I send to you by one of the officers of this Department a draft drawn by Messrs. Riggs & Co., of this city, upon the Bank of America, of New York, in my favor, and by me duly indorsed to your order, for the sum of $453,400.90. The officer who brings you this will also bring you two receipts and releases, of identical tenor, which were executed by the executors of Charles E. Hill, and three identical forms of receipts for the sum of $153,400.90 for official execution by yourself.

I have authorized the bearer to witness on my behalf your execution of the triplicate receipt, and have instructed him to leave with you the duplicate and triplicate executions, so that, with the duplicate and triplicate executions by the executors of Charles E. Hill, you will be ena led to furnish your Government and fortify yourself with an accurate ccount of the transaction.

In thus terminating a most pleasant incident of the happy relations which have always existed between our two Governments, I avail myself, &c.

T. F. BAYARD.

No. 122.

Mr. Cheng Tsao Ju to Mr. Bayard.

CHINESE LEGATION,

Washington, D. C., April 25, 1885. (Received April 27.)

SIR: I have the honor to acknowledge the receipt of your note of the 24th instant, informing me that in compliance with an act of Congress approved March 3, 1884, directing the President to pay to the Chinese Government the sum of $583,400.90 out of the residue of the indemnity received by the United States from China in pursuance of the claims convention of 1858, first deducting the sum of $130,000 to satisfy the claims of the executors of Charles E. Hill for the use and loss of the steamer Keorgeor, the President desired you to pay over to China the sum of $453,400.90, being the remainder of the sum of $583,400.90, and that you send by one of the officers of your Department a draft duly indorsed to my order for the amount.

I have the honor to state further that on yesterday the officer designated handed to me the draft above mentioned, together with the two receipts of the executors of Charles E. Hill, and that Iofficially executed receipts for the sum refunded to China, and returned one to you by the officer authorized to witness their execution.

I shall report to my Government an account of this transaction, and procure from it a receipt for the sum paid over to me, which I will forward to you when received.

I take great pleasure, Mr. Secretary, in expressing to you my thanks for your courtesy and kindness in this matter. This generous return of the balance of the indemnity fund by the United States to China cannot fail to elicit feelings of kindness and admiration on the part of the Government of China towards that of the United States, and thus the friendly relations so long existing between the two countries will be strengthened.

Accept, sir, &c.,

CHENG TSAO JU.

RECEIPT ON BEHALF OF CHINA.

I, the undersigned, envoy extraordinary and minister plenipotentiary of his Imperial Majesty, the Emperor of China, do hereby acknowledge to have received, on this 24th day of April, A. D. 1885, in the name and on account of the Imperial Government of China, from the Hon. Thomas F. Bayard, Secretary of State of the United States of America, a draft drawn by Messrs. Riggs & Co., of Washington, D. C., on the Bank of America, of New York, in favor of the Secretary of State of the United States, and by him duly indorsed to my order, for the sum of $453,400.90, in lawful money of the United States of America, it being well understood that this payment by the Secretary of State to me as the representative of the Chinese Government is in full and due execution by the President of the United States, in so far as the Government of China is concerned, of the provisions of the act of Congress approved March 3, 1835, which is word for word as follows:

"AN ACT relative to the Chinese indemnity fund.

"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the President be, and he is hereby, anthorized and directed to cause the residue of the indemnity received from China, which is now in the custody of the Secretary of State, and is known and designated in the accounts and reports of the Department of State as the Chinese indemnity fund, to be converted into coin, and the sum of five hundred and eighty-three thousand four hundred dollars and ninety cents be returned to the Chinese Government, and the balance of said fund, if any, be covered into the Treasury of the United States: Provided, That before the payment to China the Secretary of State shall pay from said fund to the executors of Charles E. Hill the sum of $130,000, upon receipt of a release in full for all claims upon China for the use and loss of the steamer Keorjeor, in or about the year eighteen hundred and sixty-three.

"Approved March 3d, 1885."

And proof having been produced before me that in compliance with one of the provisions of said act, the Secretary of State of the United States has paid to the executors of Charles E. Hill the sum of $130,000 upon receipt of a release in full for all claims upon China for the use and loss of the steamer Keorgeor in or about the year 1863, I hereby ratify the action of the Secretary of State in making such payinent, and, furthermore, in consideration of the sum of $453,400.90, the receipt of which I have above acknowledged, I do, in the name of my Government, by these presents, remise, release, and forever quit-claim and discharge the Government of the United States from all claim or demand whatsoever for or on account of any pecuniary rights which China may have acquired by virtue of the act of Congress aforesaid, and the transactions referred to therein, and I undertake to procure for the Government of the United States, from the minister for foreign affairs of China, a receipt and quittance similar in substance and effect to these presents.

In witness whereof I have hereunto set my hand and affixed the official seal of my legation, at the city of Washington, D. C., this 24th day of April, A. D. 1885. [SEAL.]

CHENG TSAO JU,

Envoy Extraordinary and Minister Plenipotentiary
Of H. I. Chinese Majesty to the United States.

I hereby certify that Cheng Tsao Ju, known to me to be the envoy extraordinary and minister plenipotentiary of China to the United States, executed the above instrument in my presence this 24th day of April, A. D. 1885.

SEVELLON A. BROWN, Chief Clerk, Department of State.