Not long ago more than 1,000 Japanese of different classes were employed in China, in schools and colleges, in the army and police, in law and prison reform, in agriculture and sericulture, in telephone and electric light companies, on railways, and in many other capacities. At present there are fewer than 400, 52 of whom are in Peking, and these numbers will be further reduced as existing contracts expire. Similar reductions are noted in the number of Chinese being educated in Japan. Three years ago there were more than 20,000; last year there were more than 10,000. The number now is 5,125, and only yesterday it was arranged that in the case of a body of 300 Government students just returned to China, only 88 would be sent to take their places." "At present each country, through its Press, is protesting against the unreasonableness of the other. Contradictory statements on questions of fact are made on almost every point at issue." The main contention has related to the projected extension by China of a railway to Fa-ku-menn from the terminus of an existing line at Hsin-min-tun, west of Mukden. It was in the agreement of December, 1905, that no railways in competition with the South Manchurian line, which Japan took from Russia, should be built. The Japanese assert that they had in view this very Fa-ku-menn extension when that stipulation was inserted. The Chinese declare that the negotiation on their part had reference solely to the area east of the Liao River. Japan made two alternative proposals for the settlement of this question: "One that the Chinese should build a railway from Fa-ku-menn to the South Manchurian Railway instead of to Hsin-min-tun, or that the Japanese should build a railway from the South Manchurian line to Fa-ku-menn and thence to the North, in which case Japan would withdraw her objection to the Fa-ku-menn-Hsin-min-tun railway, provided that China undertook not to extend the line beyond Fa-ku-menn without a previous agreement with Japan." China is said to have declined discussion of these proposals, but offered arbitration of the whole matter. Japan objected to arbitration without previous discussion of her new proposals. And so the dispute seemed deadlocked.