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112 Freights for this short route rose to $6 per bale of cotton to be carried to Whampoa, and $10 per ton for Chinese produce from Whampoa to the British ships. This depreciation of the British flag and the enhancement of the value of other flags went to such lengths that one British ship after the other was sold for nominal considerations, the American Consul especially giving his sanction to such transfers, offensive as they were to Captain Elliot. The total exclusion of British merchants from direct trade with China, which had been an accomplished fact for some time, was formally declared by an Imperial Edict published in Canton (November 26, 1839), to the effect that, whereas the English had been vacillating in their treatment of the opium question, it was no longer compatible with dignity to continue to permit their trade, and the English trade must therefore be entirely stopped from after December 6, 1839, and for ever. This state of things, continuing for twelve months longer to the great detriment of British commercial interests, formed eventually the most powerful cause resulting in a demand for the cession of Hongkong.

For the present, however, Elliot strained every nerve to induce Lin to accede to his wish that British trade should be re-established, in some form or other, at Macao, but Lin, though once more earnestly entreated by Elliot (December 16, 1839) to consent to some compromise in this direction, proved inexorable. Even the Portuguese Governor of Macao joined Lin in his obstructive policy, and when Captain Elliot (January 1, 1840) asked Governor Pinto, in the name of Her Britannic Majesty, to permit at least the storing of the remainder of British cargoes in the warehouses of Macao upon the payment of the duties fixed by the regulations of the place, he met with an equally decided rebuff. In this unfriendly line of conduct, the Portuguese Governor went even farther. At the beginning of February, 1840, it happened that atrocious proclamations against the English were again posted on the walls of Macao. Captain Smith, seeing the lives of British subjects residing at Macao endangered by those placards, ordered H.M.S. Hyacinth to enter