No. 149.
Mr. Denby to Mr. Bayard .

No. 306.]

Sir: I have the honor to report that information has reached Peking that the difficulties between China and Japan, growing out of the Nagasaki riots last August, have been settled. A harmonious understanding has been arrived at by the two Governments. The details have not been made public.

This occurrence was a serious riot between Chinese sailors and the Japanese police, in which many persons were killed. It happened at a time when I have reason to believe China was seriously contemplating sending a fleet to Corea with a view to occupying that country. But the fleet was diverted to Nagasaki owing to these troubles.

That great jealousy exists between the two Governments—Japan and China—is undoubtedly true, but there is no immediate prospect no complications.

I have, etc.,

Charles Denby.