A few days after the flight of the Queen a rumor was circulated to the effect that a large body of men belonging to the peddlar’s guild had congregated outside the East Gate and were about to enter and loot the city. A panic seized the people, and men, women and children might be seen flying in all directions, some out into the neighboring country and some up the steep sides of the surrounding mountains. The gates being all locked the people forced the South Gate and the two West gates and thus made good their escape. The king himself was affected by the rumor and leaving the palace sought safety at the house of Yi Che-wan. But the panic ceased as quickly as it had begun, and within three hours the people were returning to their homes again. The extreme haste with which the people tried to get away is illustrated in the case of one old man who seized his little grand-son, as he supposed by the hand, and fled up a mountain but found to his dismay that he had taken the boy by the leg rather than by the hand and that the little fellow had succumbed to this harsh treatment. On the fifth of the seventh moon Count Inouye arrived in Chemulpo as Japanese envoy and immediately sent word to have a high Korean official sent to Chemulpo to discuss the situation. Kim Hong-jip was sent, and as a result the Korean government was asked to pay an indemnity for the lives of the Japanese who had been killed. It appears that besides the Japanese military instructor five or six others had been killed, also a considerable amount of Japanese money had been seized and destroyed at the Japanese headquarters. The indemnity was placed at a million cash apiece for the Japanese who had fallen. This amounted to something like $2,500 each, a ridiculously small sum, but perhaps all the Japanese thought they could get. The ex-Regent replied that if the Japanese demanded this indemnity the Korean government would feel obliged to levy a tax upon all Japanese merchants doing business in Korea. This was practically a refusal to pay the indemnity and the envoy took his departure. Hardly had he left before a Chinese force 3,000 strong arrived at Nam-yang off the town of Su-wŭn. They were commanded by Generals O Chang-gyŭng, Wang Sŭk-ch’ang, Ma Kŭn-sang and by a lesser officer named Wŭn Se-gă who was destined to play a leading part from this time on. These troops came, it can hardly be doubted, at the request of the conservative party and it was from this hour that that faction turned unreservedly towards China and gave the latter occasion for beginning a series of encroachments upon Korea’s practical independence which ended in the China-Japan war. These troops encamped all about the capital, some at Pă-o-gă outside the West Gate and some at the Ha-do-gam just inside the East Gate.