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Rh But on March 16, 1841, a flag of truce having been fired upon by the Chinese, the enemy's works on Fatee and Dutch Folly were attacked and captured and a large flotilla of war junks was destroyed. By this action the western as well as the southern portions of Canton city were brought under the guns of the squadron. The factories also were occupied by British troops (March 18, 1841) and the whole city was now at the mercy of Captain Elliot. But for the second time the city was spared, without a ransom, on condition that the hostile preparations should be discontinued and trade resumed. One of the newly appointed Special Imperial Commissioners, Yang Fang, who, to the chagrin of the Emperor, had boldly recommended that 'a haven for stowage should be allowed to the foreigners,' had already arrived in Canton. He now concluded with Elliot a formal Convention (March 30, 1841). The terms of this Convention were, (1) that the British ships of war remain near the factories, (2) that the Chinese discontinue further preparations for war, (3) that foreign merchants may at once return to the factories and that foreign ships may continue the legitimate trade at Whampao, paying the usual port charges and other duties to the Chinese Government. Yang Fang and the Viceroy (Eliang) issued forthwith a joint proclamation stating that Elliot had assured them that 'all he wanted was trade and nothing else.' Accordingly they exhorted the people, by all means to continue trading with foreigners without fear. At the same time the two officials reported to the Emperor, that Elliot, in saying all he wanted was trade and nothing else, had renounced his claim to Hongkong as well as his former demand of an indemnity for the opium surrendered to Lin, and that the British fleet would retire from Canton as soon as an Imperial Decree authorizing resumption of trade with the barbarians was received.

Things now appeared to go on quietly. The Chinese officials, however, continued their warlike preparations, and secretly stirred up the people to join in the war of extermination. The continuance of the trade kept them in funds. So the foundries