When the rebels departed in 1855， the Consuls， who did not approveof the Police being entirely under the control of the Council， calledattention to the fact that they were not “sworn constables，” and thattherefore no firearms could be placed in their hands， and that theycould not interfere with the Imperial authorities or their officers in theSettlement. When any Chinese was arrested， it should be reported tothe Senior Consul， and as “None but magistrates can without illegalityhave parties apprehended and brought before them for hearing“ Whichthe Councillors were doing， the Consuls thought that the sooner thePolice were disbanded the better it would be.
A test case arose when a member of the police force stoppedand detained for a considerable time at the Barrier Gate， the Imperialcommissioner， H. E. Keih. The policeman was punished by the BritishConsul， and the Municipal Council was informed that it should takecare not to issue orders to its servants of an illegal nature， the carryingout of which subjected them to legal penalties.
Finally the police force was reorganized in such a way that themen became duly “sworn constables，” deriving their authority from theConsuls and the Chinese Government as well as from the MunicipalCouncil.
Residence of the Chinese in the SettlementAs we have pointed out， there had been a great influx of Chineseinto the Settlements owing to the troublous conditions in the vicinityof Shanghai caused by the fighting between the Imperialist troopsand the “Small Sword” Rebels. From the beginning a great differenceof opinion was manifested between different sections of the foreignresidents. Those who profited by building houses and renting themto Chinese naturally were in favour of allowing them to reside in theSettlements， but some saw the difficulties and dangers that might ariseby departing from the terms of the Treaty.
When the Consuls brought the matter to the attention ofthe Taotai， he stated that the influx of Chinese refugees into theSettlements was due to the foreigners themselves， who built tenementsfor their accommodation， and housed them regardless of the riskincurred by harbouring people of doubtful character， and thedifficulties that might arise if criminal offences were committed withinthe bounds of the Settlements.
One of the reasons for the Taotai and the Chinese authoritiesbeing generally opposed to the residence of Chinese in the Settlementswas the fear that the latter might claim exemption from taxation by theChinese Government.
The Taotai accordingly issued a proclamation prohibitingnative residence in the Settlements without special permission of therespective Consuls.
The consular authorities instructed the Municipal Council to takemeasures for the disposal of the native tenements， pointing out theimportance of abiding by the original regulations of the Treaty.
The Council， however， considered such a step as beyond itscontrol， but undertook to clear up some brothels and gambling dens.
Evidently it did not dare to try and carry out a measure so unpopularwith the majority of the Land Renters.
The refugees themselves showed no disposition to move， andforeigners continued to build tenements for them， so that theirresidences became more widely scattered than ever.
Consul Alcock then took upon himself the responsibility， andmade the necessary arrangements for the removal of objectionableChinese， and the demolition of certain tenements. Provision was madefor legalizing the residence of such Chinese as the Consuls and theTaotai might consider entitled to remain， either from their originaloccupation of 1ands and houses or on account of other circumstancesconnected with their legitimate interests and occupations.
As the squatters on the Yangkingpang refused to move， they were，by order of the district magistrate， forcibly ejected and their tenementsdestroyed. Unfortunately this occurred during cold winter weather andwas the means of stirring up considerable anti-foreign feeling.
In his despatch of February 24th， 1855 ， the Taotai madesome proposals to the Consuls to which they assented. As a result，the following regulation was drawn up and issued in the form of aproclamation.
“Any native， before being admitted to the Settlement， mustsecure a licence from the consular and local authorities and enter intosecurities， in his own name， if wealthy and of sufficient standing， orotherwise in the person of two well-known residents， for keeping theLand Regulations and contributing his share to any general assessment.
Any native guilty of a breach of registration rules will be subject toa penalty of fifty dollars for the first offence and cancellation of hislicence in the case of a repetition thereof.“These regulations were never very strictly enforced， and the rightof the Chinese to reside in the Settlement gradually became establishedby usage.
There now arose the question as to how these Chinese residentswere to be regarded—as rightful members of the community， or aspersons admitted on sufferance. The Chinese residents were taxedequally with the foreign members of the community， but had no voicein the expenditure of collected revenues， and could not participate inthe municipal government. From a theoretical point of view this seemsto have been an unjust arrangement. When we take into consideration，however， that the Chinese residents at that time had different political，social， and intellectual backgrounds from the foreign residents，one can see that admitting them to full privileges as citizens of thecommunity was fraught with many difficulties. It would have resultedin the elimination of the Settlement as a place under foreign control，as， numerically， the Chinese far outnumbered the foreigners. In otherwords， the Settlement as we know it to-day would never have beendeveloped. Shanghai would have reverted to the status of a Chinese cityin which foreigners had the right to reside and carry on trade.
It probably never occurred to early Chinese residents that therewas any injustice in the arrangement. They were quite accustomedto being taxed without representation and were not familiar withdemocratic ideas of government. They were ready to pay the taxes forthe sake of the protection afforded and for the benefits of being able tocarry on their trade in peace and safety.