eventually met by a foreign-controlled custom house out of which the present system arose when the Chinese realised how well the temporary plan worked. The second was the problem of dealing with the refugees within the area reserved for foreigners, which in time led to the growth of a municipality under foreign control, rejecting Chinese rule even over the native population except as a mixed court preserved the theory of Chinese rule. A third question was raised by the approach of the Chinese soldiers too near the settlement, which brought about the battle of Muddy Flat (1854) and several years later furnished a precedent for the doctrine that Shanghai was neutral territory.[1]
In 1856 the Arrow War and the subsequent negotiation of treaties in the north (1858) altered the foreign situation. Prior to this time foreigners had treaty rights in five seaports only; now the Yangtse was open to navigation and a certain number of cities on that stream had become ports of entry. The ratification of this treaty was delayed until after the British and French, in 1859 and 1860, renewed the war against China in the north and forced their way to Peking after having met and defeated the Mongolian cavalry leader, Senkolintsin.[2] The imperial court fled to Jehol, leaving Prince Kung to carry on the necessary negotiations.[2]
In one sense it is doubtless true that this invasion was a cause of the renewal of Taiping activities in 1858 and 1860. The withdrawal of Senkolintsin to meet the Allies probably aroused the Nien rebels to new efforts in Honan and Shantung. We know also that Tsêng Kuo-fan was more hard pressed than ever for the means to carry on
