Mr. Denby, chargé, to Mr. Gresham.

No. 26.]

Sir: The condition of affairs between the three Kingdoms seems practically unchanged. The Japanese are reported to have withdrawn their merchant steamers from the northern lines, the inference being that they are to be used for transporting troops and supplies. An indication, however, of a more friendly attitude on the part of Japan is the fact that the Japanese chargé d’affaires at Peking was yesterday received in audience by the Emperor of China, for the purpose of thanking His Majesty for his congratulations to the Emperor of Japan on the occasion of the twenty-fifth anniversary of his marriage.

The Viceroy Li is reported to have applied to the Emperor for authority to raise a large loan for military purposes. * * *

I have, etc.,

Chas. Denby.