ade and to shake
off the monopoly of the Canton merchants. In 1840 British ships-of-war
appeared off the south-eastern coast of China and bombarded it. In 1841
the Chinese opened negotiations and dismissed Lin Tse-hsue. As the
Chinese concessions were regarded as inadequate, hostilities continued;
the British entered the Yangtze estuary and threatened Nanking. In this
first armed conflict with the West, China found herself defenceless
owing to her lack of a navy, and it was also found that the European
weapons were far superior to those of the Chinese. In 1842 China was
compelled to capitulate: under the Treaty of Nanking Hong Kong was ceded
to Great Britain, a war indemnity was paid, certain ports were thrown
open to European trade, and the monopoly was brought to an end. A great
deal of opium came, however, into China through smuggling--regrettably,
for the state lost the customs revenue!

This treaty introduced the period of the Capitulations. It contained
the dangerous clause which added most to China's misfortunes--the Most
Favoured Nation clause, providing that if China granted any privilege to
any other state, that privilege should also automatically be granted to
Great Britain. In connection with this treaty it was agreed that the
Chinese customs should be supervised by European consuls; and a trade
treaty was granted. Similar treaties followed in 1844 with France and
the United States. The missionaries returned; until 1860, however, they
were only permitted to work in the treaty ports. Shanghai was thrown
open in 1843, and developed with extraordinary rapidity from a town to a
city of a million and a centre of world-wide importance.

The terms of the Nanking Treaty were not observed by either side; both
evaded them. In order to facilitate the smuggling, the British had
permitted certain Chinese junks to fly the British flag. This also
enabled these vessels to be protected by British ships-of-war from
pirates, which at that time were very numerous off the southern coast
owing to the economic depression. The Chinese, for their part, placed
every possible obstacle in the way of the British. In 1856 the Chinese
held up a ship sailing under the British flag, pulled down its flag, and
arrested the crew on suspicion of smuggling. In connection with this and
other events, Britain decided to go to war. Thus began the "Lorcha War"
of 1857, in which France joined for the sake of the booty to be
expected. Britain had just