Present conditions in China are aptly illustrated by what is happening in one of the great salt revenue stations on the Yangtsze, near Chinkiang.  That portion of the Chinese fleet faithful to the Central Government—­the better half went over to the Canton Government long ago—­has dispatched a squadron of gunboats to the salt station and notified Peking that if $3,000,000 (about L400,000) arrears of pay were not immediately forthcoming the amount would be forcibly recovered from the revenue.  Meanwhile the immense salt traffic on the Yangtsze has been suspended.  The Legations concerned have now sent an Identic Note to the Government warning it of the necessity for immediately securing the removal of the obstruction to the traffic and to the operations of the foreign collectorate.

The second telegram is equally interesting.  It is as follows:—­

The question of interference with the Salt Gabelle is assuming a serious aspect.  The Chinese squadron of gunboats referred to in my message of the 10th is still blocking the salt traffic near Chingkiang, while a new intruder in the shape of an agent of Wu-Pei-Fu [the Liberal military leader] has installed himself in the collectorate at Hankow, and is endeavouring to appropriate the receipts for his powerful master.  The British, French, and Japanese Ministers accordingly have again addressed the Government, giving notice that if these irregular proceedings do not cease they will be compelled to take independent action.  The Reorganization Loan of L25,000,000 is secured on the salt revenues, and interference with the foreign control of the department constitutes an infringement of the loan agreement.  In various parts of China, some independent of Peking, others not, the local Tuchuns (military governors) impound the collections and materially diminish the total coming under the control of the foreign inspectorate, but the balance remaining has been so large, and protest so useless, that hitherto all concerned have considered it expedient to acquiesce.  But interference at points on the Yangtsze, where naval force can be brought to bear, is another matter.  The situation is interesting in view of the amiable resolutions adopted at Washington, by which the Powers would seem to have debarred themselves, in the future, from any active form of intervention in this country.  In view of the extensive opposition to the Liang Shih-yi Cabinet and the present interference with the salt negotiations, the $90,000,000 (L11,000,000) loan to be secured on the salt surplus has been dropped.  The problem of how to weather the new year settlement on January 28th remains unsolved.

It is a pretty game:  creating artificial bankruptcy, and then inflicting punishment for the resulting anarchy.  How regrettable that the Washington Conference should attempt to interfere!