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Rh to the British Government were disregarded, the mercantile community would have no faith whatever in the quiescent policy of the Superintendents, and that, unrecognized as the Commission remained in relation to the Chinese Authorities and unable to assert their claims to political and judicial authority, they ought not to expect the British mercantile community to look to them for guidance, direction or protection. One of the merchants, Mr. Keating, having a petty dispute with the firm of Turner & Co. concerning a claim of three hundred dollars, preferred against him by that firm, went so far as to deny the jurisdiction of the Superintendents altogether, on the ground of the undefined character of their functions and of their want of power to enforce their decisions. On the same grounds Mr. Innes, another British merchant, when wronged by the Chinese, deliberately threatened the Superintendents with taking the law into his own hands and making independently reprisals upon the natives.

Whilst these and similar disputes divided the foreign merchants and their Superintendents, the Chinese Authorities and the Hong Merchants were not in any more amicable relations. The Hong Merchants were severely censured by their superiors for having failed to bring the foreign merchants under a responsible foreign head and for the consequent failure of any means of inducing them to stop the trade carried on at Lintin by the opium receiving-ships. Moreover, free trade principles began to assert themselves on the Chinese side. The Hong Merchants' own monopoly began to crumble down. For some time past the Senior Hong Merchant, who alone was solvent, had virtually been acting as the sole holder of the monopoly, but lately the other Hong Merchants, tempted by their indebtedness to the foreign merchants and to the Mandarins, had taken to the practice of sub-letting some of their privileges to private Chinese traders and shopkeepers, to whom they individually issued licences to deal in foreign goods under the names of the respective Hong Merchants. In this way it had come to pass that the neighbourhood of the factories at Canton