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Rh differential duty of twopence farthing on all teas shipped at Hongkong. The sinister expectation of the promoters of this measure avowedly was that 'the death-blow would be struck to the trade of Canton' (and Foochow). Of course this fratricidal plan of reviving the commerce of Hongkong by killing that of Canton (or any other Treaty port) had no chance of even a hearing in a Parliament the previously divided counsels of which had just converged towards the adoption, from a conscientious recognition of economic truths, of positive free trade principles by the abrogation of the corn laws (June 25, 1846). Lord Stanley emphatically refused (September 4, 1846) to entertain the proposal of a differential duty. As a last refuge, the community addressed (February 27, 1848) a Memorial to Earl Grey praying for a reduction or abolition of the land rent. They were informed in reply (July 17, 1848) that Earl Grey was willing to extend the terms of the leases or even to grant them in perpetuity.

The fact of a serious decline having overtaken the European commerce of Hongkong gradually forced itself upon public recognition and was interpreted by extremists to involve the Colony in absolute ruin. On August 13, 1845, all the leading British firms (31 in number) memorialized Lord Stanley on the subject. Sir J. Davis viewed their statements as gross exaggerations and replied by a series of arguments propounded by the Acting Colonial Secretary (W. Caine). Thereupon a deputation (A. Matheson, G. T. Braine, Gilbert Smith, and Crawford Kerr) presented (August 29, 1845) a second Memorial, in the course of which they stated that 'Hongkong has no trade at all and is the mere place of residence of Government and its officers with a few British merchants and a very scanty and poor population.' The Governor remained unconvinced, and later on (January 6, 1846) published an exhaustive trade report from the pen of Dr. Gützlaff, intended to refute the allegations of the local merchants, who, however, disputed the correctness of Dr. Gützlaff's statistics. This official report contains a rather remarkable admission of the failure of Sir 16