Nanking, July 21 Tensfon was appreciably lessened in Nanking to-day by the news that an arrangement had been made for both the Chinese and the Japanese troops to willidraw from Lukouchiao. This development is regarded as offering a loophole for a compromise between Tokyo and Nanking if they care to-take advantage of it H.—M.—Ambassador, -Sir Hughe Knatchbull-Hugessen, called on General Chiang Kai-shek at.the latter's headquarters this afternoon mention of any withdrawal of Japanese troops, and also their practically complete seizure of Tientsin, authortative foreign circles here consider that the Japanese have obtained a most important success which may be a prelude to their permanent occupation of North China, similar to that in Manchoukuo.
Text read from the printed page and cleaned; old type leaves the occasional error.