CHINA. 



185 



reply should come from Pekin as to the perfi- 

 dy practised by the Footai. The reason why 

 Major Gordon retained the command is, that if 

 lie resigned a Frenchman would be appointed 

 in his place. 



In December, a great sensation was pro- 

 duced in Europe, and particularly in England, 

 by the report that Prince Kung, the Chinese 

 Minister of Foreign Affairs had refused to ratify 

 an agreement made by Mr. Lay, inspector-gen- 

 eral of the Chinese customs at Shanghai, with 

 Capt. Osborn for the purchase of a fleet, and 

 that Mr. Lay had been dismissed from the 

 Chinese service. Mr. Lay had been authorized 

 by Prince Kung to purchase some vessels, equip 

 them, engage officers and seamen for them, and 

 retain money out of the customs for his pay. 

 He was, indeed, to make what arrangements 

 might, in his judgment, seem desirable, with a 

 view to successfully carrying out of the ob- 

 ject in view. Mr. Lay accordingly set out for 

 London, bought the ships, and put Capt. Sher- 

 ard Osborn in the command of them. Messrs. 

 Lay and Osborn entered into an agreement, 

 and settled the terms upon which the Anglo- 

 Chinese contingent should be managed and 

 paid. Some of the clauses of this document 

 were as follows : 



1. Osborn agrees to take the command of the Eu- 

 ropean Chinese navy for a period of four years, and stip- 

 ulates that there shall be no other European naval 

 commander-in- chief. 



2. Osborn, as cominander-in-chief, is to have entire 

 control over all vessels of European construction, as 

 well as native vessels manned with Europeans that 

 may be in the employ of the Emperor of China, or un- 

 der his authority, of the native guilds. 



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. 



Even the color and device of the flag under 

 which the fleet should sail were prepared, 

 and the two Englishmen were perfectly agreed 

 as to the manner in which the whole affair 

 should be managed. When the fleet reached 

 Shanghai, Capt. Osborn was greatly surprised 

 to receive instructions, not from Mr. Lay, whose 

 orders alone he had bound himself to regard, 

 but from Prince Kung, who addressed him as 

 " Osborn, the assistant commander-in-chief of 

 the Chinese navy." Mr. Lay, at the same 

 time, informed him, that he was unable to ob- 

 tain the emperor's ratification to the terms of 

 agreement, which they had settled in London, 

 and, indeed, that the Chinese authorities had 

 not even taken the trouble to acknowledge its 

 receipt. Capt. Osborn subsequently refused to 

 serve under Prince Kung. " I did not come 

 here," he writes, "or my followers either, to 

 accustom ourselves to the treatment usual 

 with Chinese sailors or soldiers, or to assist 

 in a retrogressive policy in the treatment of 

 European employes, or Europeans in general. 

 The employment of ships of war and steam- 



ers of European construction is an innova- 

 tion ; that of European officers and gentle- 

 men 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 treat- 

 ing Europeans as if they were Chinamen. By 

 submitting to such instructions and violation 

 of my original agreement, I should at once de- 

 prive myself of the power to assist in carry- 

 ing out in China the policy of Western civil- 

 ization." 



The European ministers in Pekin protested 

 against allowing Prince Kung to have the ships 

 on his own terms, and Prince Kung then request- 

 ed Mr. Bruce to sell the ships for him. Mr. Bruce 

 having requested Capt. Osborn to undertake 

 their disposal, a part of the squadron were to 

 sail for England, and Capt. Osborn, with the 

 Keangsoo, Quantung, and Amoy, sailed for Bom- 

 bay. 



The " Overland Trade Report," an English 

 paper, published in Hongkong, gives the fol- 

 lowing interesting details of this swindle : 



The downfall of the Anglo-Chinese fleet scheme is 

 likely to prove injurious and detrimental to British in- 

 terests. It would seem that the British minister was 

 palpably implicated in the fraudulent transaction, for it 

 deserves no othoe name. The Chinese Government 

 remitted Mr. Lay, when he was in England on sick 

 leave, the sum of 650,000 taels (about 200,000) to buy 

 steamers. He procured a flotilla which cost far more 

 than the means placed at his disposal, which fleet he 

 hypothecated to the British Government not only for 

 the deficiency, but under certain conditions which 

 were especially adapted for the exclusive advantage of 

 British interests. It seems that the French and Russian 

 ministers naturally became alarmed at the influence 

 which the scheme, if carried out, was calculated to 

 give the British minister, and consequently they stated 

 their objections to Prince Kung, who, being pressed by 

 the anti-foreign party in the state, became alarmed, 

 and took occasion to break off friendly relations with 

 Sir F. Bruce. The French minister supplanted him in 

 the Prince's counsels, and his Highness has declined 

 for some months all personal interviews with the Brit- 

 ish minister, during which period Mr. Lay has acted as 

 his Excellency's Chinese secretary. This state of 

 things was undoubtedly brought about by the under- 

 hand dealings of the British minister in relation to the 

 fleet, and has ripened into an ill-feeling, if not into 

 an open rupture of friendly relations, in consequence 

 of his Excellency supporting Mr. Lay and Capt. Osborn 

 in their unreasonable demands upon the Chinese Gov- 

 ernment. 



The relations of the Chinese Government to 

 the Great Powers of Europe were on the whole 

 of a very amicable character. Prince Kung, 

 the Minister of Foreign Affairs, showed himself 

 anxious to introduce reforms, and to develop 

 the resources of the country. 



One of the most important reforms that were 

 determined upon in the course of the year 

 1863, was that of the army. The Paris " Moni- 

 teur " publishes some very interesting details on 

 this subject. The Chinese army, says the " Mon- 

 iteur," which, according to official reports, 

 should consist of 1,000,000 infantry, and 800,000 

 cavalry, had actually not one tenth of the num- 

 ber under arms. It is composed of Tartar 

 troops, exclusively employed in the guard of 



