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Rh the Peace Conference, which resulted in nothing, led him to believe it was impossible to re-establish the absolute centralization of power in Peking. Then he wrote a book entitled Self-Government of the Southwestern Provinces and Peace, in which he advocated the formation of a federation among the southwestern provinces and final unification by an understanding between this Union and the Northern government. This idea on one hand received the approval of the southwestern leaders who actually put it into practice and on the other hand incurred the displeasure of the northern leaders. In the autumn of 1920 Mr. Hsu, in cooperation with Liang Chichiao, Hsiung Hsi-ling and Fang Yuan-lien, drafted a provincial constitution for the province of Hunan. It was submitted to the Hunan government and was adopted by the Hunan Provisional Assembly in the winter of 1920. During 1921-22 Mr. Hsu devoted his time and energy entirely to the promotion of a federal system throughout the different provinces. In the spring of 1921 he gathered together a number of prominent persons and organized the Federation Government Association whose object was to push through the adoption of this system of government. In June 1922 Mr. Hsu was appointed by the Peking government Director-General of the Currency Bureau. In October he received the Second Class Paokua Chiaho. In March 1923 Mr. Hsu was appointed President of the Commission for the Discussion of China's Finance and was awarded the First Class Tashou Chiaho Decoration.