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Rh satisfactory development of our prosperity is mainly due to the emancipation of ail shipping and trade from fiscal vexations and exactions, I trust no custom-house machinery will ever be introduced, either for the collection of tariff or harbour dues or for any purpose which may check the free ingress and egress of all shipping to and from the port nor the free transfer of commodities from hand to hand. Hongkong presents another example of the elasticity and potency of unrestricted commerce which has more than counterbalanced the barrenness of the soil, the absence of agricultural and manufacturing industry, the disadvantages of its climate and every impediment which would clog its progress.'

The greatest revolution that ever upheaved the affairs of Hongkong came from a purely commercial source, from the sphere of its shipping interests. I refer to the opening of the Suez Canal. For several years after that momentous event, Hongkong commerce seemingly followed its old impetus in much the same lines as before. But step by step it was seen that a change had come over Hongkong's dream, amounting to a complete revolution. The markets in England for silk, tea and other Chinese exports had been entirely ruled by the prices paid in China. Now the price realised in England became the norm and guide of all purchases to be made in China. As to imports into China, the change wrought, by bringing the English manufacturer into closer connection with the Chinese consumer, was equally formidable. The China Trade now drifted into the hands of home capitalists. Successful trading on credit, formerly so common in Hongkong, became year by year rarer and large monied firms only appeared to profit in the long run.

But the remarkable thing is that even the political and strategical importance of Hongkong was immensely enhanced by that same commercial event. It was the opening of the Suez Canal which placed Hongkong in line with Gibraltar and Malta and made it combine their functions as applied to the Far East. Hongkong now dominates the China Sea as Malta dominates the Mediterranean and strategically closes