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550 13, 1880) and were succeeded by Captain J. J. Francis and Lieutenant J. McCallum. A turret ironclad, the Wivern, with whose seagoing qualities fault had been found in England, was sent out to Hongkong (June 2, 1880) at the suggestion of the Governor, to be permanently stationed here for harbour defence.. The last flickering up of the dying war spirit was observed on the occasion of a grand naval review held at Tsimshatsui (December 30, 1880), but by the beginning of the year 1881 the war cloud had passed away, by the consent of Russia to restore Kuldja to the Chinese, and the whole question of Colonial defences was shelved.

The year 1877 was on the whole a fairly good one for mercantile men. Business, although rather restricted in extent, was of a healthy character. Shares were steadily rising, though there was little speculation, and real property became more valuable. But a change took place in 1878. Freights now commenced to fall, profits on goods of all descriptions became smaller and smaller, and wild speculation took possession of the share market, with the usual result of inflation followed by subsequent depreciation. Still, there were no bubble companies kept afloat merely by the credulity of the public, and stocks were in a sound condition. But a general depression crept into all commercial branches, locally as well as in China and Japan, and several local firms of very old standing failed. At the beginning of the year 1879 freights were so low that the carrying trade ceased to be remunerative. Shipowners began to think of laying up their vessels rather than run them at a loss. Accordingly a Conference of London steamship owners formed (September, 1879) a combination to regulate the tonnage on the berth, to prevent the accumulation of cargoes, and to protect each other from loss. Through want of coherence among the signatories of these Conference rules, rather than through outside competition, the combination failed and the rules were cancelled (January 5, 1880) so far as Hongkong was concerned. But apart from freights, the year 1879 was in other respects also a year of great depression. Arrivals of