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276 according to the terms of the lease.' As the Colonial Treasurer refused the Queen's sovereigns, which about this time had been declared by the Lords of the Treasury to be a legal discharge for the sums they represented 'throughout Her Majesty's dominions' and to require no further Colonial enactment for their legalisation, complaints were made on all sides. The contention was accentuated by the fact that the Colonial Treasurer took dollars at a fixed rate of four shillings and twopence though the market value might be five shillings.

Steam communication between Hongkong and Canton was placed on a satisfactory basis by the establishment (October 19, 1848) of the 'Hongkong and Canton Steam Packet Company.' The first Hongkong Directors of this Company were Messrs. D. Matheson, A. Campbell, T. D. Neave and F. T. Bush. They commenced operations in spring 1849 with two small steamers (of 250 tons each) built in London, The Peninsular and Oriental Steam Navigation Company commenced in 1849 running a steamer (the Lady Mary Wood) regularly between Hongkong and Shanghai, but failed in an attempt, made in December 1850, to induce local merchants to pay a monthly subsidy in lieu of postage. The same Company established, in January 1853, a regular monthly mail between Hongkong and Calcutta, giving thereby the Colony the advantage of regular fortnightly communication with England. Telegrams had to be sent through intermediary agents at Gibraltar or Trieste, the latter route becoming now the favourite. The increased facilities thus provided, were not much relished by Hongkong merchants, because they accentuated the keenness of competition. The leisure with which business was formerly conducted in the time of monthly mails, was now supplanted by an annually increasing high-pressure rate of communication with all parts of the world. In other respects also local trade had by this time undergone an alteration. The profits of the China trade, formerly enjoyed by a few, were now divided among the many. The days of the merchant princes were now a dream of the past. Fortunes were still made but it took some decades of years now to make