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sovereignty over the barbarian territory, or accept the responsibility towards Japan for having left their depredation unpunished. By the wish of the Yamen Ministers the answer was postponed for three days, and on the 18th the Yamen Ministers visited the hotel of our mission. They now agreed to regard the fact of having left the barbarians unchastised as neglect on their part, and to regard our expedition as just; but instead of paying any indemnity, they proposed to pay a certain sum of money as a gift to the families of the Liukiu people killed by the Formosan barbarians, on the condition of our evacuating the island. They were not even ready to fix the sum by mutual agreement, and refused to give any written engagement for it. Okubo, of course, did not agree to these evasive terms, and proposed the sum of 3,000,000 yen by written contract as indemnity to be paid before evacuation, so that the negotiations were again protracted till the 23rd, on which day Okubo announced the mission to be at an end, and made a declaration to the Yamen that Japan would hold the position of having chastised the barbarians, considering the territory as masterless. The 26th was fixed as the date of departure, and a part of the mission had already started for Shanghai on the 26th, when the British Minister in Peking, Mr. Wade, interceded.

Mr. Wade had already intimated to Okubo that the question of peace and war between Japan and China could not be indifferent to him in view of the 200 British merchants living in China, and that he would personally ascertain where the chief difficulty lay with the Chinese Government. It was easy to believe that what lay heavy on the Chinese mind was the idea of the Celestial Empire having to pay ‘indemnity’ to a small island empire. The name ‘indemnity’ having to be avoided, such a sum as 3,000,000 rio would look like an ‘indemnity’ in any case, and hence the amount would also have to be reduced. He notified that the Yamen was ready to pay at once 100,000 rio, to be given to the families of the molested people, and 400,000 rio to defray the various expenses incurred by the Japanese Government, this last sum having to be paid after the evacuation. The difference between 3,000,000 and 500,000 is not small, but money was not what Okubo wanted. So he proposed to consent on the following conditions: (1) That the Chinese Government engage to regard the expedition to have been a just undertaking. (2) That all the diplomatic papers exchanged between the Governments concerning the Formosan expedition should be returned, and the whole affair regarded as not having occurred. (3) That the Chinese Government should pay to the Japanese Government 100,000 rio for the succour of the molested