# Europe in China/Chapter 21

CHAPTER XXI.
The Administration of Sir John Pope Hennessy.
April 22, 1877, to March 7, 1882.
r (subsequently Sir) John Pope Hennessy, C.M.G., arrived in Hongkong on 22nd April, 1877, too late in the evening to take the oaths of office on the same day. He was welcomed on board by Major-General Sir F. Colborne, and by the Administrator, the Hon. J. G. Austin, and on landing, at Murray Pier, by the Heads of Departments, Members of Council, Bishop Raimondi, and a number of the leading residents. Mr. Hennessy's reception in Hongkong was not an enthusiastic one, but it could not be said that public prejudice welcomed him. There was, indeed, a presentiment that troublous times might ensue, but there was also, on the part of the European community, the honest determination to judge of his administration as they might find it. Mr. Hennessy had enjoyed various opportunities of gathering experience. He had sat, as Member for King's County, in the House of Commons (1859 to 1865), and he had served as Governor of Labuan and Consul-General for Borneo (1867), as Governor of the West African Settlements (1872), of the Bahamas (1873), and of the Windward Islands (1875). Pending the issue of Letters Patent, Mr. Hennessy had now been appointed provisionally (March 12, 1877) as Lieutenant-Governor of Hongkong, and accordingly he was sworn in as such (April 23, 1877), on the day after his arrival. On this occasion, Mr. Hennessy volunteered the announcement that he would endeavour to follow the footsteps of his distinguished predecessor, Sir A. Kennedy, and that the main policy of his administration would be to protect the mercantile interests of this Colony which, he said, rivalled in ​its transactions the greatest Colonies of the world. Six weeks later, the Letters Patent (dated April 10, 1877) having arrived, Mr. Hennessy was sworn in, with the usual solemnities, as Governor and Commander-in-Chief of Hongkong and its Dependencies (June 6, 1877).
With the exception of a visit to Japan (May 31, to September 6, 1877) and a trip to Peking (September 11, to October 24, 1881), the Governor spent his whole term of office in Hongkong. During his absence in Japan, the Hon. W. H. Marsh, and, during his trip to Peking, the Hon. M. S. Tonnochy administered the Government temporarily. On 22nd April, 1880, Her Majesty was pleased to confer on Mr. Hennessy the honour of knighthood, which fact was published in the Hongkong Government Gazette by anticipation on 21st April, 1880.
Apart from private correspondence with a few distinguished diplomatists in China and Japan, Sir John Pope Hennessy had, like his predecessor, no diplomatic correspondence with the representatives of other Governments, beyond one brief exchange of notes with the Governor of Macao. A Chinese junk having properly cleared from Hongkong (November 29, 1877) with a cargo of gunpowder for Macao, was stopped by the officers of the Chinese Customs Blockade on issuing from the harbour and forced to return to Hongkong. When the owners of the junk complained to the Governor, they were informed (June 29, 1878) that the Governor could not interfere, because the Cantonese Authorities considered Macao to be a part of China. This reply having been noticed in the public papers, the Governor of Macao forthwith addressed an official protest to Sir John, asserting the sovereignty of the King of Portugal over Macao and pointing to the fact that all the nations of Europe had hitherto recognized it, and so also the Chinese officials, while the flag of Portugal had waved over the peninsula for 300 years. Sir John replied that he did not lend any countenance to the Chinese pretensions to the sovereignty of Macao.
During this administration, the Colony had unfortunately repeated occasions of expressing sympathy with the inroad which ​death made among the Courts of European nations. The flags of the Colony were at half-mast, and minute guns were fired, on the decease of the Queen of the Netherlands (January 13, 1877), the King of Italy (January 15, 1878), Princess Alice (December 18, 1878), Czar Alexander II (March 14, 1881) and President Garfield (September 20, 1881). In striking contrast with his predecessor, who took no notice of the death of the Emperor of China, Sir John ordered the flags of the Colony to be lowered and 21 minute guns to be fired (April 23, 1881) on the death of the Chinese Empress Dowager, the event being solemnly announced in the Gazette. Sir John also attended officially at celebrations, in honour of the birthday of the King of Portugal (October 31, 1878) and of the second anniversary of the coronation of Pope Leo XIII (March 3, 1880), held at the Roman Catholic Cathedral.
In the way of hospitable entertainment of the representatives of foreign Powers, Sir John had even more to do than his predecessors. Of Chinese officials, there came the Hoppo Tsun Kai (May 11, 1878); Chen Lan-pin, Minister to the United States, Spain and Cuba (June 5, 1878); Chung How, the Ambassador to St. Petersburg (November 11, 1878 and November 26, 1879); Liu Wan-shung, Minister to Germany (November 11, 1878); the Canton Viceroy, Liu Kwan-yih (January 25, 1880); finally, the new Hoppo Chung Kwan (April 10, 1881). There were also a good many foreign dignitaries whom Sir John had the honour to entertain in one way or other. General U. S. Grant, the hero of the American Civil War, arrived in Hongkong (April 30, 1879), was entertained at a state dinner at Government House (May 3, 1879), spent a few days in Canton and Macao (5th to 10th May), was presented with an address by the Chinese (May 12, 1879), but had to leave Hongkong before the garden party, with illuminations and fire-works, which the foreign community had arranged in his honour, could come off. The next visitor was Prince Thomas of Savoy (Duke of Genoa) who arrived in the Frigate Vittore Pessani (June 23, 1879, and again in 1880). Prince Heinrich of Prussia arrived in the Frigate Prinz ​Adalbert (May 1, 1880), assisted at the unveiling of the portrait of the Prince Consort at Government House (May 7, 1883) and acted as joint host with the Governor in receiving the Duke of Genoa and the community of Hongkong at Government House on the occasion of Her Majesty's birthday (May 24, 1880). Next year King Kalakau, of the Hawaiian Islands, arrived in Hongkong (April 12, 1881), and stayed at Government House. Mr. C. P. Chater gave a public banquet in his honour (April 18, 1881) at Kowloon, and a public reception was held on the same evening at Government House. The King left for Bangkok a few days later (April 21, 1881), not without having had a taste of the bitter feeling existing at the time between the Governor and the British community. The greatest event, however, was the arrival (December 20, 1881) of the Detached Squadron with the Princes Albert Victor and George of Wales on board the Bacchante. A ball was given in honour of the Royal visitors at Government House (December 22, 1881) and the town was festively illumined (December 24, 1881), but the public had no opportunity of seeing the Princes, until December 30, 1881, when, after calling at Government House, and taking lunch there, the Princes attended in the evening a public subscription ball given at the City Hall. The Princes, having previously visited Canton (26th to 29th December), left Hongkong on the last day of the year. The visits of the ex-Governor, Viscount de Paco d'Arcos, of Macao (October 31, 1879), of his successor Senhor da Graça (November 26, 1879), and of the Brazilian Embassy to Peking (May 28, 1880) conclude the list of foreign representatives entertained at Hongkong during this period.
A new Charter, issued by Letters Patent (April 9, 1877), revoked the Supplementary Charter of June 8, 1875, and defined the constitution, power and authorities of the office of Governor, stated that Members of Executive Council may be appointed by Warrant or by Instructions, and added to the power of granting pardons also that of remitting fines. The new Charter further revoked Article XI. of the Charter of 1843 and stated that, in case of death, incapacity or absence ​of the Governor, the Government should be administered by the Lieutenant-Governor or by an Administrator appointed for the purpose, or by the Colonial Secretary for the time being.
One new Sub-Department, that was much needed and did good work thereafter, was established by Sir John (February 1, 1881), viz. that of the Government Marine Surveyor (J. S. Brewer), under the Merchant Shipping Consolidation Ordinance (8 of 1879). The attempt (November 16, 1878) to form a new office of Chinese Secretary to the Governor and Translator to the Colonial Secretary (E. J. Eitel) failed to gain the approval of the Secretary of State, and the office which the latter substituted for it, viz. that of Supervisor of Interpreters and Translator for the Supreme Court (November 25, 1881) hardly outlasted this administration. To the management of the Government Gazette, Sir John gave much painstaking attention. He combined the separate editions of the English and Chinese issues of the Gazette into one (January 1, 1879) and had every document, that could be of any interest to the Chinese, translated in the Gazette, the English and Chinese texts being placed side by side in parallel columns. In the Police Department, the vacant office of Assistant Superintendent of Police was abolished by the Secretary of State (January 30, 1879). A more important change was made by Sir John (March 17, 1879) by ordering two-thirds of the Police Force to be always placed on night duty. The Superintendent of Police himself reported three months later (July 1, 1879) that this measure had a decidedly beneficial effect in diminishing the amount of crime. The employment of steam-launches (1879), the removal of the Water Police from the rotten hulk in the harbour to the new Tsimshatsui Station (1881), together with the numerical increase of the Force, were steps of progress which the Governor reluctantly conceded to the demands of the Superintendent. The subject of competitive examinations was a favourite topic with Sir, John, who announced (May 28, 1877), shortly after his arrival, that, as a general rule, all appointments at his disposal in the Civil Service of this Colony ​would be given by a system of competitive examinations, similar to that which had been established for the Civil Service of the United Kingdom by Her Majesty's Order in Council of June 4, 1870. To stimulate the study of the Chinese language, Sir John published (February 4, 1881) an extract from an old dispatch by Sir George Grey (April 28, 1855) stating that, as a rule, subject only to very special exceptions, no application for increase of salary in the Civil Service of Hongkong was to be made for any person who had not learnt Chinese. He also published a notification issued (July 2, 1855) by order of Sir J. Bowring to the effect that, in claims for promotion, a knowledge of Chinese would be considered a recommendation. But the Board of Examiners, specially appointed by Sir A. Kennedy, was quietly shelved by Sir J. Pope Hennessy. At first, indeed, he recognized the existence of the Board, by publishing (April 27, 1877) the names of the Members (C. C. Smith, F. Stewart, J. Bussell, E. J. Eitel and A. Lister), but a month later he ignored the existence of the Board by appointing, without apparent reason, for the first of the new competitive examinations (June 2, 1877) a separate Board (Bishop Burdon, C. C. Smith, and Ng Choy), and did so again for the next examination (June 19, 1877) when three examiners (Bishop Burdon, Ch. May, and Ng Choy) were appointed. When the original Board thereupon sent in their resignation (July 18, 1877), it was not accepted, but a separate Board was thenceforth appointed for every competitive examination. The Gardens and Afforestation Department, which in 1872 had been treated as a separate Department, but in 1873 placed under the joint control of the Surveyor General and a Garden Committee, was (February 8, 1877), before Governor Hennessy's arrival, again made a branch of the Survey Department by the dissolution of the Garden Committee. The result was considerable friction, which continued until the management of the Gardens and Plantations was once more constituted a separate Department (March 15, 1879). A report, giving a history of the former dissensions, was published in the Gazette (October 16, 1879) ​but subsequently (February 5, 1881) cancelled by order of the Secretary of State, An Order of the Privy Council (October 23, 1877) directed that the jurisdiction of the Supreme Court should include crimes and offences committed by, or disputes existing between, British subjects at any place on land being within 10 miles of any part of the Colony. The defalcations of the Deputy Registrar of the Supreme Court, discovered in October 1878, gave a sudden and painful shock to the community, because the investigation revealed a total absence of control and audit in the Supreme Court Department, for which the latter blamed the Executive, while the Executive sought to lay the blame on the Court. Sir John appointed (September 14, 1878) a Commission (Ch. May, G. Philippo, A. Lind, W. Wotton) to inquire into the management of all monies or securities coming into the hands of any officers attached to the Supreme Court, but substituted, for this Commission, later on (November 7, 1878) another (Ch. May, G. Philippo, Th. Jackson, W. Wotton), instructed to inquire whether or not greater precautions may be adopted for the security and distribution of moneys or securities received by the Supreme Court. In accordance with some of the recommendations made by this Commission (May 25, 1879), the office arrangements of the Supreme Court were remodelled and a new Registrar (H. Gibbons) was sent out (April 14, 1880) by the Secretary of State. But internal friction now arose in the Court, through continuous misunderstandings between the Chief Justice and the new Registrar, which culminated in a lamentable public scene (July 26, 1880), and put a stop to the business of the Court until the Registrar was interdicted (July 30, 1880) from the performance of his duties. After the great fire of 25th and 26th December, 1878, which destroyed 361 houses in the centre of the town, and which, in the opinion of the community demonstrated the absence of all system in the management of the Fire Brigade, Sir John promised (January 18, 1879) various reforms. But nothing of any moment having been done, the foreign community deputed a Committee (W. Keswick, Ph. Ryrie, ​Th. Jackson, W. H. Forbes, H. Hoppius, W. Reiners, J. B. Coughtrie and E. F. Alford) to urge upon the Governor the appointment of a skilled firemaster, the employment of paid firemen, and the desirability of an adequate supply of water. Sir John promised to get a skilled firemaster from England and to. provide, if possible, high level tanks and fire brigade mains.. The question of the water supply was, however, a financial one, and pending the consideration of the two alternative schemes thus put forward, viz. the Taitam reservoir scheme and this new project of tanks for fire brigade mains, the re-organization of the Fire Brigade was suspended, and meanwhile neither of the two water supply projects was carried out. Beyond the purchase of a new fire-bell for the Clock Tower (July 12, 1880), the supply of new uniforms for the brigades in town and villages (July 19, 1880), and the publication, in English and Chinese, of the old Fire Brigade Ordinance (4 of 1868) and a series of regulations issued under that Ordinance (October 5, 1880), the Fire Brigade question was left in statu quo. There were other Departments of the Public Service, between the Heads of which and the Governor there was said to be constant friction, but the disputes did not force themselves upon public attention, though as early as October 7, 1880, one of the resolutions of the public meeting of that date specially desired a Commission from outside the Colony to be appointed, in order to inquire, among other things, 'into the relations between the Governor and his officials.'
The Legislative Council Chamber was the arena of almost perpetual strife. In several cases even the election, by the Governor, of new Members of Council impressed the British community as an intended affront. In October, 1878, when the Surveyor General (J. M. Price) applied for leave of absence, and the Registrar General (C. C. Smith) proceeded (October 17, 1878) to Singapore to take up the appointment of Colonial Secretary of the Straits Settlements, the foreign community of Hongkong, whilst wondering how Sir John would reply to the damnatory resolutions of the public meeting of 7th October, 1878, were ​startled by the news than Mr. J. A. da Carvalho, a worthy Portuguese clerk in the Treasury, had been appointed Acting Colonial Treasurer with a seat on the Council. The appointment had, however, to be revoked, as it was found that Mr. Carvalho, being an alien, could not take the oath of allegiance. A similar surprise was sprung upon the Colony on 22nd January, 1880. The Hon. H. B. Gibb left the Colony on that day and, in the ordinary course of events, his seat in the Council would have been given again to Mr. H. Lowcock, who had returned from England; but, to the surprise of the community, Sir John gave the appointment to a Chinese barrister, Mr. Ng Choy (January 22, 1880). These two appointments were interpreted by the English community as attempts to gain the favour of the Portuguese and Chinese sections of the community, to create an anti-English party feeling, and to strengthen personal government. Some years later another vacancy in the Council was filled, in an unobjectionable manner, by giving a seat in the Council to Mr. E. R. Belilios, one of the two leading Indian opium merchants of the Colony, who had favourably distinguished himself as a Director of the Hongkong and Shanghai Bank.
A proviso was added (May 23, 1877) to the Companies' Ordinance of 1865, that the amount to which shares may be reduced by subdivision shall in no case be less than one-fourth of the original share. With the approval of Lord Carnarvon the Bill (1 of 1877) was passed (June 21, 1877). This was the only legislative measure of the year 1877. Next year three very brief Ordinances were passed, viz. a Chinese Emigration (Special Licenses) Ordinance (1 of 1878), a Gaol Amendment Ordinance consisting of one paragraph (2 of 1878) and a Markets' Ordinance (3 of 1878). More work was done in the year 1879. Two Opium Excise Ordinances (1 of 1879 and 7 of 1879), an Amendment of the Emigration Ordinance (6 of 1879) and a bulky Merchant Shipping Consolidation Ordinance (8 of 1879) were passed in 1879, but had to be further amended in the year 1880. In the latter year a short Ordinance (6 of 1880), giving the French mail-steamers the status of men-of-war for twelve months. ​was passed and thenceforth annually re-enacted. A Naturalization Ordinance (4 of 1880), giving a European resident (E. J. Eitel) the privileges of a British subject within the Colony but not elsewhere, having been approved by the Queen, was in subsequent years followed by an annual batch of such Ordinances, as Chinese residents now began to attribute great value to such naturalization, limited as it is. A few more Ordinances were passed in the year 1881, dealing with Macao Extradition (1 of 1881), the Census (2 of 1881), the naturalization of Chinese (5 to 10 of 1881), banishment and conditional pardons (12 of 1881) and a fresh Amendment of the Companies' Ordinance (14 of 1881). Finally, in January, 1882, a Tramway Ordinance (1 of 1882) provided for liberty to establish tramways all along from Westpoint to Shaukiwan and from St. John's Place to Victoria Gap.
But although the legislative work done by the Council during this period produced comparatively little fruit, there was much in the way of leaves and the leaves were prickly. The Council meetings were not frequent but lengthy, the attention of the Members being largely occupied by Sir John with exhaustive laudations of the financial, commercial and industrial progress of the Colony. Frequently also the time of the Council was monopolized by polemical debates on assumed local race prejudices, on the proper treatment of Chinese criminals and on the general principles of Sir John's policy. Instead of making the most of those points on which all were agreed, these discussions only served to bring into prominence, and to widen year by year, the breach which the Governor had created in the relations existing between him and the European community. As to the constitution of the Council, the Hon. Ph. Ryrie (February 26, 1880) brought forward the question whether the Governor would recommend an addition to the number of unofficial Members, on the ground that the proportion of three unofficial to five official Members (beside the Governor) was unsatisfactory. Sir John stated that he had already made the same recommendation to ​the Secretary of State, suggesting that the number of unofficial Members be raised to four or five. Next year (August 8, 1881) another unofficial Member was accordingly added (E. R. Belilios). The old complaint of insufficient time being allowed to unofficial Members, to examine the Estimates, was once more brought forward (August 31, 1880), and it was further arranged that, if any general discussion were thought desirable, it might be raised on the motion to go into Committee. The question of a proper system for reporting the debates in Council was also raised (August 23, 1881) by the unofficial Member who suggested the employment of an official short-hand reporter. Sir John promised to take the matter into consideration, but no such appointment was made. Another much needed suggestion was made by the Acting Chief Justice who moved (June 13, 1881) that the repeal, amendment and consolidation of a large number of the Ordinances in force in the Colony had become a work of urgent necessity. Sir John stated that he had placed the matter some time ago into the hands of the Attorney General, and steps would soon be taken to revise and consolidate the Ordinances.
As regards judicial matters, the admission to the local bar (May 18, 1877) of the first Chinaman (Ng Choy) who had adopted the law as his profession, deserves special mention. The admission to the bar of Mr. J. J. Francis (April 16, 1877) added new zest to the local displays of forensic eloquence. On the other hand, the departure from the Colony of the Chief Justice, Sir John Smale (April 11, 1881), and of the Queen's Counsel, Mr. Th. C. Hayllar (January 23, 1882) who had repeatedly served as Attorney General and Puisne Judge, deprived the Colony of two of its brightest legal luminaries. Among the cases tried in Court during this period, the interest of the community was specially attracted by the trial of two engineers of the coast steamer Yesso who were convicted (January 29, 1878) of manslaughter on account of the explosion of a boiler: by the Kate Waters case, in which three Malays were convicted and sentenced to death (May 13, 1879) having murdered their ​captain, mates and Chinese crew on the high sea; and by a Club case (April 8, 1881) testing the right of the Committee of the Hongkong Club to expel members. In May, 1879, the Chief Justice decided a question of considerable importance to commercial men, by laying down, in the strongest terms, that a comprador, receiving no wages directly from his employer but remunerating himself out of commissions paid by customers, is essentially a servant, no matter how he may receive an equivalent of wages. For the benefit of journalists, the Chief Justice defined (December 12, 1879) the rights and liabilities of newspaper proprietors. As to the exceptional status claimed by the French mail-steamers, an important decision was given (January 7, 1880) by the Chief Justice, when the local Opium Farmer applied for a search warrant against the S.S. Anadyr. The Chief Justice ruled that the French mail-steamer was not a vessel within the meaning of the Convention concluded (September 24, 1856) between England and France, but the property of a private Company; that even if she was a national vessel, no legislative sanction had been given to the terms of the Convention, and that it was not competent for the Crown to deprive a subject of his right as against any vessel without legislative sanction; that, assuming the vessel was within the terms of the Convention, that Convention only applied to vessels carrying the mails between the ports of England and France, and Shanghai being neither a French nor an English port, a vessel on a voyage between Shanghai and Hongkong did not come under the terms of the Convention until the mails were put on board in Hongkong; that, finally, the vessel covered a breach of a fiscal Ordinance, that is, covered smuggling which is contrary to the comity of nations and an abuse of international immunities. A search warrant against the Anadyr was accordingly issued, but the French Consul declined to give any assistance, and the vessel sailed for Singapore without any search having been made.
The population of Hongkong increased, during this period, from 130,168 Chinese in 1877, to 150,690 Chinese in 1881, whilst the non-Chinese population increased during those same ​years from 8,970 to 9,622. The total population of the Colony increased therefore during those five years by 21,258 souls.
The revenue of the Colony increased proportionately. The revenues of 1877 amounted to $1,005,312, and those of 1880 to $1,069,947, while the revenue of 1881, owing to particular and exceptional causes, rose to $1,324,455. Going into particulars, we find that the revenues of the Colony, which in 1876 had stood at $919,088 increased in 1877 by $86,224. But in 1878 the revenue fell off again by $57,674. Another increase, amounting to $16,457, occurred in 1879, followed in 1880 by an increase amounting to $105,852, and in 1881 by a further, most extraordinary, increase of $254,508, so that the revenue of 1881 totalled up to the above-mentioned respectable sum of $1,324,455. The difference which this rapid development of the financial resources of the Colony, during this administration, presents when compared with the sluggishness of the revenues during the preceding five years, is very striking. The only question is how this enormous increase accrued.
The annual variations of the revenue derived from the working of the Stamp Ordinance naturally depend on the state of the share market. There was in 1877, through the establishment of a Chinese Stamp Agency and through prosecutions instituted against Chinese evading the Stamp Ordinance, an increase, amounting to $24,951, in the yield of the stamp tax. as compared with 1876. A further small increase, amounting to $8,584 was obtained in 1878, followed in 1879 by a decrease of $12,307 which the Blue Book explains as caused by a decrease in the transfer of shares. In 1880 there was a small increase of $5,913. We see therefore that during the first four years of this administration the annual yield of the stamp tax varied very little, being $120,956 in 1877 and $120,678 in 1880. But in 1881, the precise year during which an extraordinary mania for gambling in land and house property seized the Chinese, the stamp tax suddenly produced $165,340, constituting an increase of $44,661. In 1882 the yield of the stamp tax fell again by $18,360 and the Blue Book of that year states that 'this large decrease ​is entirely due to the collapse of the land speculations of last year.'
The yield of the police, lighting, water and fire brigade rates rose in 1877 to $194,838, constituting an increase of $14,945 as compared with the year 1876. This increase is explained in the Blue Book as caused by an increase in the number of tenements. In 1878 there was a further small increase amounting to $7,060, followed in the year 1879 by a large decrease amounting to $26,583 which Sir John accounted for by a lower valuation having been fixed by the valuators for the year. Next year, in 1880, the yield of the rates rose again by $59,215, explained by the restoration of the former higher valuation. In 1881, the rates fell off slightly, there being a decrease of $8,761. There was therefore little development in respect of rates on tenements, as the yield of the rates, which in 1881 produced $221,796, was only $26,958 above the produce of the same rates in 1877.
As to the land revenue, the produce of land leases was $123,064 in 1877, constituting an increase of only $2,950 as compared with the results of the preceding year. Nor was there any more variation in subsequent years, for the yield of land leases in 1881 was $123,115, shewing an increase of $51. But as to the yield of premia on leases newly granted, the case is very different. From this source there was, in 1877, through extensive land sales arranged by order of the Governor, an increase amounting to $72,158. But in 1878 there followed a decrease amounting to $73,958, another decrease of $9,624 in 1879, and again a slight increase of $4,590 in 1880. Now considering that the premia on land newly granted amounted in 1878 to $11,031, in 1879 to $1,407 and in 1880 to $5,998, it is rather startling to find that these premia suddenly rose in 1881 to $203,659. Sir John, in his speeches and official documents, laboured hard to shew that this extraordinary increase of revenue was the sober result of the natural and healthy progress of the Colony. The mania for gambling in land, which was the rage all through the year 1881, is the real solution of the puzzle.
​The revenue derived from the opium monopoly amounted in 1877 and 1878 to $132,000 a year, which was less, by $1,500, than the amount derived from the same source in 1876. This monopoly, which had all along been held by a Chinese syndicate in Hongkong at an unfairly low rate, was sold by public tenders in 1879, to a partner of the Singapore Syndicate (Tan King-sing), in a manner with which the public was not satisfied, at an increase of no more than $77,916. At the next sale (February 11, 1882), the farm was sold, for one year, for the sum of $210,000, being virtually the same amount as that obtained in 1879.
It appears from the foregoing analysis of the principal sources of local revenue, that, whilst there was as regards rates on tenements and opium a moderate increase of revenue spread over the whole period and commensurate with the natural increase of the population, there was in respect of stamp duties and premia on leases newly granted an unnatural sudden increase, derived from the one and the same source, viz. dealings in land, and confined to one and the same year, 1881. Early in the year 1881, the Chinese residents of Hongkong were seized by a mania for speculating in land and in house properties. This frenzy lasted until October, 1881, when the bubble burst and a general panic ensued. The value of the properties, which had been unduly inflated by the Chinese speculators, then fell suddenly some 45 per cent. and great depression followed. The Chinese, and principally those among them whom Sir John had looked upon as the leading men of the Chinese community, were the principal sufferers by this collapse of the land speculations, the Government and British and foreign residents having been in most cases the original sellers, after which the properties changed hands rapidly at ever-increasing rates, until at last a deadlock ensued from want of funds. The collapse of the bubble was followed in 1882 by numerous bankruptcies and endless litigation. On the whole, however, the results were far less disastrous than might have been anticipated, the depreciation in real values being comparatively slight. Still, all through the ​year 1882, the property market was encumbered with the estates of embarrassed owners. What the original cause of this sudden mania for gambling in land and in house property was, is difficult to say with certainty. Foreign residents generally attributed it to Sir John's inflated periodical laudations of the general prosperity of the Colony, and to his personal influence with the so-called leading Chinese traders, whom he constantly urged to take the position occupied by foreign merchants in the Colony and to purchase dwelling houses and offices in the European quarter of the town. But whatever may have caused this gambling mania, this much is clear, that the greatest gainer in the matter was the Government which derived, at the expense of Chinese gamblers, a net increase of its revenue, amounting, in one year, to the sum of $242,322.
Such was the result of Sir John's financial policy in the year 1881: profit from gambling in land $197,661, profit from gambling in house property $44,661, total $242,322. So marked was this success, that the unofficial Members of Council, before they had had time to realize the true character and cause of the increase of revenue, complimented the Governor (August 23, 1881) on 'the success of his financial policy.' They added, however, to their rash eulogy the modest request that, in the face of such a large reserve and annual surplus, a reduction of taxation should now be made. Sir John replied that he would, indeed, like to reduce the house tax from 12 to 6 per cent., and he thought if larger powers were given to the opium farmer, the monopoly would yield $400,000, in which case a reduction of the taxation might be allowed.
Turning now to the question of expenditure, we find that there was in 1877 a decrease in the expenditure of the Colony, amounting to $29,008, caused chiefly by a reduction of expenses for public works. In 1878 there was an increase of expenditure, amounting to $37,315, caused by the payment of the Colony's share in the Postal Convention ($20,023), increased Police expenses ($10,051), and laying of submarine cable to Green Island ($5,211); but expenditure on public ​works decreased from $83,409 in 1877 to $68,633 in 1878. In 1879 the expenditure further increased, but only by $16,344, the outlay on public works was reduced to $62,571, the increase of the expenditure of 1879 being chiefly caused by orders for Police recruits and steam-launches ($10,839) and new furniture for Government House ($5,107). In 1880, when the revenues were calculated to amount to over a million dollars, the Governor ventured to increase the expenditure by $21,140, and in 1881, with a still rising revenue, the expenditure was further increased by the modest sum of $33,507. This was certainly economic management and the result was showy. For there was, throughout this administration, an annual surplus of revenue, over expenditure, left in hand. This annual surplus amounted, in the successive years from 1877 to 1881, to the following sums respectively, viz. $132,105, $37,114, $37,227, $121,933 and finally (in 1881) to $342,873.
With the exception of the re-construction of the Praya wall, which had been demolished by the typhoon of 1874, hardly any public works of any importance were undertaken during this administration. On the day after Sir A. Kennedy's departure, the Legislative Council agreed (March 2, 1877) to a vote of $200,000 which sum was to be taken from the Special Fund, and the sum of $50,000 was at once appropriated for the purposes of the re-construction of the Praya wall. Nevertheless the work was delayed until the autumn of 1879 when it was commenced in earnest, and, as happily no typhoon intervened, the work, which cost altogether $244,254, was completed in 1880. The new Civil Hospital was completed in 1877, a small market at Yaumati and a Lunatic Asylum at Saiyingpun were built in 1879, a new Lock Hospital was erected in 1880 and in 1881 work was commenced at the Causeway Bay Breakwater. The construction of this Breakwater had been urgently recommended in 1877 by a Commission (H. G. Thomsett, r.n., J. M. Price, J. Dixon, r.n., S. Ashton, J. P. McEuen, r.n., R. McMurdo) and their scheme had been strongly supported (November 4, 1877) by Admiral Ryder, but it was not until the end of 1881 that ​the work was commenced and the sum of $3,090 spent on it. The main burden of the work fell therefore upon the next administration. As regards public works, Sir John's term of office is chiefly remarkable for the number of important works discussed, declared urgent and rejected or postponed. On 12th November, 1878, the foreign property owners of Hongkong memorialized the Governor, asking that the Praya road be widened 20 feet, by proportionate reclamation of the foreshore, in connection with the reconstruction of the Praya wall. This proposal, a sensible and modest anticipation of the more ambitious reclamation scheme started ten years later, was rejected on the ground that it would delay the re-construction of the Praya wall. Again, after the fire of 25th December, 1878, which laid a large area of houses in the overcrowded central portion of the town in ashes, it was strongly urged upon Sir John that he should use this opportunity for widening, and improving the direction of, the streets of that district, but the suggestion was rejected as too costly. The erection of a new Gaol on the separate system, though indispensable for the effectiveness of the Governor's scheme of repressing crime without flogging, was indefinitely postponed by Sir John for financial reasons. The construction of new Central School buildings, for which a costly site had been purchased and cleared of houses, was postponed from year to year under various pretexts, and left untouched. The Taitam waterworks, the plans for which had been elaborated and approved under the previous administration. Sir John fought shy of for years, and when at last the Colonial Office sent out peremptory orders that the work should be commenced at once. Sir John, for purely financial reasons, took it upon himself to disregard the commands he received from Downing Street, and the work was not commenced until 1882, on the eve of his departure. The same was the case with the Kowloon Observatory. This scheme was first mooted in spring 1877, when some shipmasters and the manager of the P. & O. Company circulated for signature a petition requesting the Government to arrange for the daily ​dropping of a time ball. The movement was taken up by the Surveyor General (J. M. Price) who elaborated the very plan on which the Observatory was subsequently established and suggested the construction, on mount Elgin at Kowloon, of an Observatory, which should be placed under the charge of a professional man to be recommended by the Astronomer Royal, and, whilst procuring storm warnings and meteorological observations, secure the daily dropping of a time ball in front of the Water Police Station. Apart from the subsequent demand for astronomical observations, every essential feature of the present Observatory scheme was proposed in detail by Mr. Price. On 30th October, 1877, Admiral Ryder wrote a letter, warmly supporting Mr. Price's suggestions and adding the recommendation that the observation of tides and currents should also be included in the scheme. Both papers were published in the Government Gazette of 17th November, 1877, and in his Estimates for the year 1878 Sir John included -the sum of $5,000 for the construction of an Observatory. Nothing was, however, done in the matter until some three years later, when another series of papers was published in the Gazette (September 2, 1881), propounding a seemingly new scheme, which, though being merely an expansion of the details of Mr, Price's scheme by Major H. S. Palmer, R.E., with the superaddition of some recommendations concerning astronomical observations to be taken, not only omitted all mention of Mr. Price, but gave the credit of the scheme to Sir J. Pope Hennessy. Nevertheless the construction of the Observatory was left to the next administration, though Major Palmer took great pains in making stellar observations (published in the Gazette of March 4, 1882), by means of which he determined the site of the Observatory to be in Lat. 22 degr. 18 min. 11.91 sec. North.
Statistics of crime, and theories as to the best treatment of Chinese criminals, were a very prominent topic of debate in Council and in the public press during this period. Sir John arrived in the Colony with the determination to apply to the ​treatment of Chinese criminals the humanitarian views as to prison discipline and the objections to corporal punishment which, after centuries of progressive civilization, had lately gained ground in Europe as applicable to European prisoners. Shortly after the Governor's arrival, flogging was practically abolished. Only a few whippings, privately administered within the walls of the Gaol, took place. This change, and the attempt Sir John made to establish a Chinese Discharged Prisoners' Aid Society, although it proved a complete failure, made a great impression upon the Chinese criminal classes, among which Sir J. Pope Hennessy was thenceforth spoken of as 'the merciful man.' 'If we have a gaol on the separate system,' said Sir John (September 17, 1877), 'where the prisoners must do some useful hard work, and where they know there is not the slightest chance of their release before the end of the Judge's sentence, except by steady good conduct; if we provide reformatory and industrial training for juvenile criminals, and if we let it be clearly understood that second offences will be punished with a long sentence, that will do more to check the growth of crime than anything else we can devise.' An excellent theory this, but considering that Sir John established no prison on the separate system nor any reformatory for the reception of juvenile offenders, the theory could hardly be expected to check crime in Hongkong. The community differed from their Governor not merely because they thought that his mode of treating prisoners would be ineffective in the absence of flogging, but chiefly because they considered the immediate introduction of the separate system a practical impossibility, and meanwhile they looked to the branding, deporting and flogging system as having been found practically an effective deterrent during two preceding administrations.
In order to make his theories as to the treatment of prisoners and the abolition of flogging acceptable to the Council and people of Hongkong, Sir John laboured assiduously to produce criminal statistics, calculated to show that the re-introduction of the branding, deporting and flogging system, at the beginning ​of Sir A. Kennedy's administration, had not only failed to reduce crime, but that on the contrary crime had been rapidly increasing in Hongkong since that time. In spite of voluminous arrays of figures, and notwithstanding the most dexterous handling of plausible deductions from them, placed before the Council and the public with the consummate skill of the orator and the special pleader, the community stoutly maintained that, whatever might be logically deduced from Sir John's statistics, their own personal and practical experience was, that life and property had been more secure in Hongkong all the time before the arrival of Sir A. Kennedy's successor, than it had been ever since. The more Sir John insisted upon the accuracy of his statistics and the correctness of his analysis of his figures, the more was the distrust of both, on the part of the community, converted into positive irritation. Now it so happened, whether in consequence of the Governor's treatment of criminals or otherwise, that the year 1878 was extraordinarily fruitful in serious crimes. On 1st February, an armed attack was made by a large gang of Chinese burglars on the village of Aplichau. On 10th May, the Superintendent of Police and several constables were wounded in the streets by armed burglars whom they had intended to intercept. On 30th May a woman was murdered in town. On 31st May again a woman was murdered at Sheko. On 14th July a third woman was murdered at Taipingshan. On 8th August a Portuguese was murdered by a European. Then, on 25th September, from 40 to 80 armed burglars attacked a shop in Winglok Street, when these marauders took forcible possession of the thoroughfare, held it for some time against armed Police and finally escaped with their booty in a steam-launch. When the news of this night attack spread in town next morning, public indignation, which had been gathering for some time, owing to the palpable increase of serious crime, burst out into strong condemnation of the Governor's systematic lenity to criminals and of the encouragement thus given to crime. A public indignation meeting was called for. Before it could be held, another crime occurred which added fuel ​to the flame, for a European house in Seymour Terrace was attacked (October 3, 1878) by armed burglars.
On 7th October, 1878, the great public meeting of this period was held on the cricket ground. The following resolutions were, with hardly any opposition, passed. It was resolved, (1) that life and property had been jeopardized by a policy of undue leniency towards the criminal classes: (2) that flogging in public had been found the only really deterring punishment, and that to its suspension was due the daring boldness which had lately characterized crime; (3) that a Commission of medical men should be appointed to inquire into the alleged injurious effects of flogging on the back; (4) that the almost total abolition of deportation was injurious and would cause the criminal population of South China to overcrowd the Hongkong Gaol; (5) that a Commission from outside the Colony should be appointed to inquire into the application of criminal laws, the carrying out of sentences of the Courts, and the relation between the Governor and his officials, and finally (6) that a copy of these resolutions should be forwarded to the Secretary of State through the Governor. Mr. H. B. Gibb was in the chair, and the movers and seconders of the foregoing resolutions were Messrs. W. Keswick, W. Reiners, W. H. Forbes, G. Sharp, D. Ruttonjee, W. S. Young, H. H. Nelson, A. MacClymont, H. Lowcock, N. J. Ede, A. P. McEwen and C. D. Bottomley. The senior unofficial Member of Council (Ph. Ryrie) was conspicuous by his absence. Strong as the indictment contained in the above resolutions was, both in argument and in the support it received from the British and foreign community of Hongkong, the Secretary of State left the Memorial embodying those resolutions unanswered for nearly a year. Meanwhile the Chinese Committee of the Wato Dispensary at Wantsai canvassed the lower classes of Chinese shopkeepers in the interest of Sir John, whose impeachment at the bar of public opinion was resented by them as an attack on a Governor whose policy was characteristically pro-Chinese. Accordingly they produced an address to the ​Queen (October 29, 1878) signed by 2,218 shop-keepers. It was practically an expression of confidence in the Governor, intended as a set-off against the views of the British and foreign community, and couched in the usual inflated style of exaggerated flattery, common in China. After some significant hesitation, the Committee of the Tungwa Hospital, representing most of the Chinese merchants, also presented (November 13, 1878) a Memorial, deprecatory of the resolutions passed at the public meeting. On 5th May, 1879, the Chinese were informed that Her Majesty was pleased to receive their address. On the same day Sir John re-appointed the gentleman (H. B. Gibb), who had acted as chairman of the great indignation meeting, to a seat in the Council. On 31st May, 1879, the movers and seconders of the resolutions of that meeting addressed to the Secretary of State (Sir Michael Hicks-Beach) a complaint on account of their Memorial having been left unanswered. A few months later (September 17, 1879), Sir John, deeming himself to have scored a victory, had the satisfaction of publishing in the Gazette the resolutions of the public meeting and a series of documents connected with it, including the reply of Sir Michael (dated July 17, 1879) to the Memorial of the European community. In this reply the Secretary of State quoted statistics showing a great increase of serious crime having taken place in 1877 and 1878, admitted also that during those two years the criminal classes of Hongkong had advanced in. audacity, combination and the habit of carrying arms, and acknowledged the reasonableness of the alarm felt by residents in the Colony, but declined sending out a special Commission, believing that meanwhile all cause for fear had been removed by the action of the Governor. Nevertheless crime had continued to flourish for a little longer. On 22nd October, 1878, a coolie was beaten to death in High Street and on 17th January, 1879, an armed attack was made on Hunghom. In January, 1879, the general sense of insecurity was such that a rumour spread among the Chinese and gained credence that preparations were being made by a fleet of pirates to descend upon Hongkong ​and to sack the whole town. The rumour was so strong that the Police took accordingly precautious. However, with the year 1879 Sir John commenced a system of increased strictness of gaol discipline. The system of deportation also was resumed in 1879 and a rule was made that all old offenders should be tried in Supreme Court, where they might receive sentences commensurate with habitual indulgence in crime, instead of the frequent short sentences inflicted by the Police Magistrates. These measures served to disperse the illusions which Chinese offenders had entertained concerning the regime of 'the merciful man' and crimes began to decrease, both as regards their type and their frequency. Unfortunately the annual reports of the Superintendent of Police for the four years from 1878 to 1881 were suppressed and for them were substituted, by order of the Governor, bare statistics of crimes committed. But even these tables show that there was in 1877 an increase of serious crimes, amounting to 12.86 per cent., which the Superintendent ascribed to famine and floods in China and to the unusually high price of rice in Hongkong. In 1878 there followed a further enormous increase of serious crimes amounting to 32.31 per cent. The year 1879 brought a decrease of 8.19 per cent. but, whilst in 1880 there was a further decrease of 14.43 per cent., there was a fresh increase of serious crimes in 1881, amounting to 13.55 per cent.
Whether successful or not in the reduction of crime, Sir John gained his main points in the treatment of Chinese criminals. Almost all that he had been seeking in this respect since he made the first declaration of his philanthropic policy in the Legislative Council in 1877, he obtained in November, 1880, when Lord Kimberley sanctioned the final abolition of all branding of criminals, permanent discontinuance of public flogging, repeal of all Ordinances providing for the flogging of Chinese, prohibition of all flogging except in cases where it would be inflicted in the United Kingdom, and finally an order that flogging of Asiatics should in all cases be on the breach and not on the back. In September, 1881, notice was given that the Prison Amendment ​Regulation Ordinance (7 of 1880) was disallowed, whereby the old law (2 of 1878 and 4 of 1863), which this Ordinance had been intended to modify, revived.
In May and July, 1878, the attention of the Government was directed to the custom prevailing among the Chinese community of Hongkong, as throughout the whole Empire of China, of buying and selling girls for the purpose of domestic servitude. This custom was generally practised in Hongkong by means of nominal adoption connected with the payment of money to the parents in return for the privilege of using the child's services. The Attorney General (G. Phillippo) distinctly declared (June 21, 1878), in contradiction of the Governor's original views, that this practice did not constitute a criminal offence (May 30, 1878); that parties entering into a transaction of this nature in England would in no way bring themselves within the operation of the criminal law (June 21, 1878), and that the Police Magistrates had no jurisdiction in the matter. At the same time the Chinese community observed that, since the abolition of the Macao coolie trade, the practice of kidnapping young Chinese girls for exportation to the Straits Settlements, California and Australia, had enormously increased. As the kidnappers were believed to be chiefly people of the Tungkoon District, a Committee of Tungkoon merchants, headed by Mr. Fuug Ming-shan, was appointed by the Chinese community to devise some means to stop these kidnapping practices. Mr. Fung Ming-shan and others accordingly petitioned the Governor (November 9, 1878) for permission to form an Anti-kidnapping Association with power to employ detectives. Sir John appointed an official Committee (C. V. Creagh, J. J. Francis, W. M. Deane, E. J. Eitel) to investigate the matter, and this Committee recommended that the sanction of the Government be given to the constitution of the proposed Association on the basis of definite statutes (Gazette of February 4, 1880) drafted by Mr. J. J. Francis. The Association, which adopted the name Poleung Kuk, was accordingly formed and received (June 24, 1880) the formal approval of the Secretary of State. Later on (Gazette of August 5, 1882) rules ​for the working of the Poleung Kuk were published, differing from the statutes framed by Mr. Francis in that they did not require the Association to be incorporated under the Companies' Ordinance of 1865, nor did the new rules give to the Government that tight hold on, and constant insight into, the working of the Poleung Kuk which Mr. Francis' draft scheme had devised. Meanwhile, however, the Chief Justice also noticed that the practice of kidnapping, for purposes other than the coolie traffic, was alarmingly on the increase, and, making no distinction between the sale of girls in connection with domestic servitude and in connection with exportation (for immoral purposes), repeatedly denounced from the Bench, in summer 1879, the system of purchasing or adopting girls for employment as domestic servants as a form of slavery. The Chief Justice alleged that there were from ten to twenty thousand female slaves in the Colony, and that this form of slavery flourished only through the failure of Government officers to enforce the existing laws. This action of the Chief Justice caused at first great alarm and excitement among the Chinese. A deputation called on the Governor (September 24, 1879), and, while asking for permission to form the above mentioned Anti-kidnapping Association, suggested to regulate Chinese domestic servitude by means of registering all purchased servant girls. The fears of the Chinese community were, however, considerably allayed, when the Governor, who had previously been anxious to institute prosecutions against the purchasers of servant girls, now assured them that he would not allow of any harsh measures dealing with an established Chinese national custom. But on 6th October, 1879, the Chief Justice again denounced the female servitude system of Hongkong as strongly as ever, called it down-right slavery, and addressed a few weeks later (October 20, 1879) a letter to the Governor, in which he requested that the Police should be instructed to bring every person, known to have a purchased servant, before the Magistrate, to be dealt with mildly. The Chief Justice at the same time alleged that kidnapping was encouraged by the social habits of foreigners in Hongkong, that a class of mean whites ​was springing up in Hongkong and living in abject misery, and he claimed that it was the duty of the Government to put down a system which, by debasing all moral tone, tended to crime. To rebut the arguments of Sir John Smale, Dr. Eitel wrote (October 25, 1879) an exhaustive report on the origin and characteristics of Chinese slavery and domestic servitude in Hongkong. The whole dispute was thereupon referred to the Secretary of State, and reviewed in a debate in the House of Lords (June 21, 1880), when Lord Stanley of Alderley, favourably criticizing Dr. Eitel's report, stated that the Attorney General had been wrong in his exposition of the law, but that, on the other hand, the Chief Justice had rushed into wild exaggerations. Lord Kimberley remarked, on the same occasion, that the custom of adoption was deeply interwoven with the forms of Chinese society, and that care must be taken not to confound the habits and institutions of the Chinese with what prevailed in other parts of the world. After this, the brief turmoil caused by the local slavery question disappeared as quickly as it had arisen. The Poleung Kuk, however, did good work in bringing kidnappers to justice, and on 24th March, 1881, the Chief Justice, having observed a steady decrease in kidnapping crimes, complacently ascribed it to his own efforts. He stated from the Bench that Chinese public opinion now appeared to have been educated to a great sense of the evils of kidnapping and the worst of the evils arising out of domestic servitude, that his denunciations of these crimes had produced an awakening of the Chinese conscience, and that a large proportion of the Chinese community now desired to improve the tone of social thought in China. 'Slavery of every kind,' he said, 'is doomed in China; it is merely a question of education through discussion and time.'
The question of Colonial defence was agitated for several years during this administration. All through summer 1878, rumours of war with Russia were current. Whilst this war fever lasted, the Volunteer Ordinance (2 of 1862) was re-published (May 4, 1878) and a new Volunteer Corps was formed and placed (May 16, 1878) under the command of Captain Dempster, ​subsequently succeeded by Captain A. Coxon, under whom Mr. W. Danby served as Lieutenant. By 1st June, 1878, the names of 142 gentlemen, who had been enrolled in the Volunteer Force, were published in the Government Gazette. Torpedoes were constructed at the Naval Yard and torpedo practices were held in the Lyeemoon. The batteries also were put in a temporary state of defence and guns were mounted in some. In January, 1879, the Governor received instructions to proceed with the necessary works in order to place several batteries, thrown up during the preceding year, in a condition of permanent defence, and operations were immediately commenced at North Point. The Home Government, having at last woke up to a recognition of the need of a comprehensive system of Colonial defence, appointed (September 8, 1879) a Royal Commission, headed by the Earl of Carnarvon, to inquire into the state of the defences of the Colonies. The instructions of this Commission were published in Hongkong (December 17, 1879) and, at the request of the Commission, a local Committee set at once to work to report on questions connected with the defences, armament and provisioning of Hongkong. The rumours of an impending war between Russia and China gained in probability in spring 1880 and thus kept up public interest in the matter of Colonial defences. In summer, General Gordon, known as Gordon Pasha, spent a week in Hongkong and Canton (3rd to 9th July, 1880) and made various suggestions as to the defences of Hongkong, advising especially the removal of the Naval Yard, Barracks and Military Stores, to Causeway Bay. On his return from a visit to Li Hung-chang in Tientsin, he published in the China Mail the main part of the advice he had given to the Chinese Government, and made a brief, but fruitless, attempt to interest the leading Chinese merchants of Hongkong in a proposal to concert measures towards the expulsion from China of the Manchus and the restoration of a Chinese Dynasty. The war fever was now dying out and dissensions arose in the Volunteer Corps. The Commandant, Captain A. Coxon, and Lieutenant W. Danby resigned (July ​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 ​foreign ships declined to the extent of 5.28 per cent., the greatest decline being on the part of vessels under Continental flags. Money was scarce in the Colony and quotations for most stocks continued to fall, though known to offer good investment for capital. Sterling exchange declined until the dollar touched 3s. 6⅛d. and the tael fell below 5 shillings. Never, it was said, was trade less profitable in Hongkong. However, with the year 1880, a general improvement set in. Trade now shewed a disposition to be more brisk and remunerative, than it had been for years before. Speculation was kept within reasonable limits, time bargains, owing to the bitter lessons of 1878, were now regarded as dangerously hazardous ventures, and stocks accordingly kept on a sounder footing. The H.C. & M. Steamboat Company received a new lease of life by a friendly arrangement with the opposition line of Messrs. Butterfield and Swire. In the year 1880 the sugar refining industry of Hongkong commenced to be a great source of wealth to Hongkong, and the East Point Company solidified for the time all the local sugar interests by purchasing the concerns of dangerous competitors. Nevertheless there was room for yet another large sugar factory, and next year (July 6, 1881) ground was purchased at Quarry Bay by Mr. E. Mackintosh for Messrs. Butterfield and Swire, who immediately commenced the erection of new and extensive sugar works. The Hongkong and Shanghai Bank attained in 1880 to a commanding position in the China Trade, being content to mind its own legitimate business. Year after year, throughout this period, the Bank made a substantial addition to its reserve fund, it being the intention of the Directors to raise the reserve fund to a level with half the amount of the paid up capital. Most noticeable was, by the end of the year 1881, the growing favour in which the Bank was held by investors. Its shares continued to rise and stood at 116 per cent. premium at the beginning of 1882. The announcement in the London Gazette (November 14, 1881) of the charter of incorporation of the British North Borneo Company, was hailed in Hongkong with great satisfaction. It was generally considered that the ​new territory, though thinly peopled, was capable of great development, that labour could be readily supplied from China and that the situation of North Borneo, midway between Hongkong and Singapore, was even of political and strategical importance.
The old problem of the Customs blockade, the only point regarding which Sir John might have usefully redeemed his promise to protect local commercial interests, was not brought a single step nearer solution during his administration. In 1877, Sir A. Kennedy, before leaving the Colony, forwarded to the Secretary of State his recommendations with reference to that clause of the Chefoo Convention which referred to the Mixed Commission that was to settle the blockade question, and the Legislative Council recorded (February 20, 1877) its sense of obligation to the efforts of Sir Arthur to remove the impediments to commercial intercourse between Hongkong and China. But for more than two years nothing further was done in the matter, except by the blockade officers who became more audacious than ever in their interference with the trade of the Colony, and by mild remonstrances forwarded by Sir J. Pope Hennessy to the British Consul in Canton whenever Chinese petitioners presented a specially strong grievance. For the blockade officers now attempted to levy their exactions on non-dutiable articles of daily consumption, and although this was resisted and eventually, owing to the representations made by the Consul to the Viceroy of Canton, abandoned, the blockade officers succeeded in confining the exemption from duties to positively fresh provisions, and then went further and excluded even cattle from the catalogue of non-dutiable articles. When Sir Thomas Wade passed through Hongkong (April 7, 1879), on his way to England, the Committee of the Chamber of Commerce told him that they considered the Convention as a retrograde measure, needing careful revision, and that, although five new ports (Wuhu, Wenchow, Ichang, Pakhoi and Hoihow) had been opened under its provisions, it was their earnest hope that Lord Salisbury would refuse to ratify it. Great was the surprise of the ​community, when it was reported that, in a debate in the House of Lords (May 9, 1879), Lord Salisbury had stated that the Governor of Honokong had reported that the grievance, which a certain clause of the Chefoo Convention intended to remove by the appointment of a Mixed Commission, had ceased to exist and that therefore there was no further reason to appoint the Commission. This was the more puzzling as, a few weeks before this news arrived in the Colony, Sir John had admitted in Legislative Council (May 29, 1879), in speaking of the blockade, that 'there is something pressing on the junk trade of the Colony that prevents its expansion.' When Sir Th. Wade again passed through Hongkong (December, 1879), he suggested to a Committee of the Chamber that the blockade stations would not be removed by the Chinese until the Colony devised some scheme by which the Chinese Government could collect the revenue fairly due to them. Sir John, taking the same view, now gave some hints of the plan by which he proposed to remove the blockade. He stated in Legislative Council (December 30, 1879) that, if the trade in salt were put down and an undertaking entered into for the collection of duty on opium, the Chinese Government would be willing to remove the taxing stations. Practically, therefore, the question was whether the Colony as willing to sacrifice the freedom of the port in order to gain the removal of the blockade, or, in other words, whether the Colony would prefer to have Chinese Customs offices in town or Chinese blockade stations outside the harbour. Such was Sir John's plan, so far as he unfolded it. The determination shown by him, on all occasions, to court the good-will of the Chinese Authorities, combined with his habitual disregard of the views of 'the British trader,' as he called the mercantile community of Hongkong, caused the community to mistrust any scheme for the abolition of the blockade emanating from Sir J. Pope Hennessy. Hence there ensued now the general apathy of hopelessness, which Sir John was careful not to disturb, and thus it happened that the blockade question was allowed to slumber all through the year 1880. On 10th March, 1881, the ​Chamber of Commerce, once more appealed to the Secretary of State for the abolition of the blockade and invited the principal Chambers of Commerce in the United Kingdom to support their petition, but this movement did not produce any results during Governor Hennessy's term of office.
The currency question entered upon a retrograde movement now, owing to the greater influence the Chinese gained at this time. Seeing that it had become an established custom in Hongkong to prefer a clean currency and to accept broken silver or chopped dollars only at a discount of one per cent., the Canton Cotton and Yarn Guild passed a resolution (April, 1877) that Chinese dealers in Hongkong should suspend trade with any foreign firm refusing to accept broken silver at par value of currency. At first the European merchants made joint resistance to this attempt to force broken silver and chopped dollars upon their acceptance. But the local Chinese dealers supported the movement initiated by the Canton Cotton Guild and presented a petition to the Registrar General asking the Governor to make broken silver a legal tender. Sir John hesitated. Unfortunately, however, individual foreign merchants yielded (May 5, 1877) to the pressure brought to bear upon them by the Chinese, and by 19th May, 1877, the demands of the guild, through want of unanimity among the European merchants, were generally accepted. The latter now confined themselves to memorialize the Government against the Chinese proposal to make broken silver (including chopped dollars) a legal tender. The memorialists did not propose to prohibit the practice of chopping dollars, but earnestly deprecated any compulsion to be brought upon merchants unwilling to accept chopped dollars as currency. A year later (March 7, 1878) the Chamber of Commerce, recognizing that there was no prospect of the proposed British dollar being coined in England by the Imperial Government, pronounced now in favour of reviving the Hongkong Mint. It was alleged that the former closing of the Hongkong establishment was a premature and ill-advised measure, that there were now excellent guarantees for the success of the undertaking, and ​that the profits derivable from the subsidiary coins alone would pay the expenses of the Mint. It was also stated that if the Government objected to undertake the management of the Mint, it might be started by a private Company under Government supervision. Sir John, however, shelved the whole question. Meanwhile attention was drawn to the manufacture in the Colony, at the village of Tokwawan, of immense quantities of Annamese cash for exportation to Annam and Tungking, where no State Mint existed. Some of the manufacturers of these cash were tried in the Police Court (Hon. C. B. Plunket) but discharged, as no offence against English law was brought home to them. But thereupon the Colony itself was flooded with these cash, until a notification was published in the Gazette (October 29, 1879) warning the people that the circulation of these cash in the Colony was illegal. On 23rd February, 1880, the Chamber of Commerce resolved to memorialize the Government, requesting that action be taken with a view to make the Japanese yen current in Hongkong, the Chinese community having (February 5, 1880) petitioned the Government to the same effect. Although this was in entire accordance with Sir John's own wishes, no action appears to have been taken in the matter by this administration.
In the sphere of emigration, considerable irritation was caused in January, 1878, by the case of two ships which took emigrants under the belief that permission would be granted, but at the last moment Sir John refused to sign the warrant. The S.S. Perusia, the first steamer of the new China-Peru line, had thus to sail (January 13, 1878) without her cargo of emigrants, and the charterers of the American ship Charter Oak were put to serious loss, having filled the ship with emigrants for Honolulu, but being met, at the moment of her intended departure (January 15, 1878), with a refusal on the part of the Governor to sign the warrant, because the Tungwa Hospital Committee had represented to him that the emigrants would be lured into slavery. The consequence was that trade with Honolulu was for several years afterwards conducted from ​Whampoa and taken up by the China Merchants S. N. Co., which sent one of their steamers, Hochung (October 20, 1879), to Honolulu with a large number of emigrants, and endeavoured, through Captain C. C. Moreno, to negotiate a treaty between China and Hawaii. The only emigration that Sir John sanctioned was emigration to Demerara (December 23, 1878) and subsequently to Antigua. Emigration to the Australian Colonies the Governor was specially averse to and he discouraged it (in 1881) in a manner which caused strained relations between Sir John and the Harbour Master's Department. The reason was that the labouring classes of several Australian Colonies began (since 1878) to agitate for the total exclusion of Chinese labourers and artisans. In this connection, Sir John took special credit to himself for having stopped what he called deportation of criminals to Australia (November 22, 1879). It appears that for several years the practice had obtained in Hongkong of allowing Chinese prisoners under sentence of deportation to elect the country, China or otherwise, to which they wished to go, and in case any one preferred to go to Australia, he was allowed to do so, the Police seeing him on board, to make sure that he left the Colony. Thus it happened that in several cases men left the Gaol to emigrate to Australia, and this was the practice Sir John stopped. A few years later, there was a debate in Council (August 23, 1881) which brought out the difference of opinion that separated the community from the Governor on the question of emigration, as on almost every other subject. The Hon. F. B. Johnson drew attention to the unrestricted right which persons of any nationality in Hongkong had, to go to another country, and stated that Chinese profited greatly by their sojourn in foreign countries, that trade follows wherever they go, and that Hongkong benefits largely from the passenger traffic and from the trade which that traffic gives rise to. On the other hand Sir John declared that Chinese emigration was not desired by foreign countries and that the Chinese Government was opposed to it because it took the bone and sinew out of the country. However, in spite of Sir John's opposition to Chinese emigration, ​the natural outflow of the Chinese population continued, though in a diminished degree, to utilize the facilities for emigration offered by Hongkong in some form or other.
Apart from the foregoing subjects, there were but few minor questions of commercial interest agitating the mind of the community during this period. In June, 1878, the Gunga case aroused some transient indignation against the Spanish authorities at Manila, the S.S. Gunga having, after striking on a reef on her way from Hongkong to Australia, put into Manila in distress for coal, when the Spaniards seized her on account of some informality in declaring the ship's cargo. Another matter of transient interest was the proposal made at a meeting of the Chamber of Commerce (March 4, 1879), to establish a general exchange and commercial sales-rooms where merchants might meet on a common platform, membership being open to all classes and nationalities. A few months later (May 28, 1879) the promoters of the Hongkong Commercial Exchange secured offices at the Marine House, and at a meeting held at the City Hall rules were drawn up and a Secretary (E. George) appointed to work this institution, which collapsed almost as soon as it was started.
The junk trade of the Colony did not develop, but shewed rather a steady decrease, during the first four years of this period. A slight increase took place in 1881, as compared with the preceding year, but whilst in 1877 as many as 26,500 junks with 1,798,788 tons entered and cleared in Hongkong, the corresponding figures for 1881 are 24,339 junks with 1,680,025 tons, and this in spite of a considerable increase of the Chinese population. The rise and fall of the commerce of Great Britain appears to exercise very little influence on the junk trade of the Colony which is more affected by the increase of the Chinese population of Hongkong, by the varying degrees of strictness exercised at the blockade stations and the variations of the policy of the Canton Provincial Authorities, than by the commercial movements of London or Manchester. As regards the import and export trade of ​Chinese merchants in Hongkong, the development of the China Merchants S. N. Co. was of great moment. This Company, in which Chinese merchants of Hongkong hold a large share, and which was practically the creation of Li Hung-chang, the Viceroy of Chihli, succeeded, after many mistakes and losses, in making good reports and paying fair dividends (10 per cent. in 1881), besides writing off a liberal sum for depreciation of its fleet. After establishing a Chinese Insurance Company, Li Hung-chang's next step was to run steamers to Honolulu (October, 1879), and when this measure was found unremunerative, a new departure was taken (October 11, 1881), by putting a steamer on the berth for London, with a view to commence direct trading between England and China and to establish a firm of Chinese merchants in the City of London. An association was formed for the purpose in Shanghai and Hongkong with a capital of £150,000. The avowed object was to wrest the China Trade from foreign hands and to carry the struggle into the enemy's camp. Sir J. Pope Hennessy encouraged this enterprise on the ground that the interests of the Imperial trade would be furthered by bringing the English manufacturer and the Chinese consumer nearer together, though it might be to the detriment of the British intermediaries of the trade in the Colony. But, as the Company had no experienced men to start the business in London, and as it naturally met with uncompromising opposition from British merchants and shippers, the attempt proved a conspicuous failure. Even more short-lived was another project, which Sir John did his utmost to encourage and which, in his farewell summary of the condition of the Colony, he triumphantly pointed to as a sign of progress, viz. a proposal to start, at Belcher's Bay, a Dock to be worked with exclusively Chinese capital for the purpose of docking the steamers owned by the China Merchants S. N. Co. and other Chinese firms. It was merely a paper scheme, and as Li Hung-chang naturally declined to benefit the Colony in any way, it fell to the ground. There was at ​one time a third gigantic scheme on foot. Li Hung-chang memorialized the Throne on the subject of opium and dispatched (August 8, 1881) the Taotai Ma Kien-chung on a secret mission to the Viceroy of India, to ascertain how far the Indian Government would be willing to meet his proposal that India should year by year gradually reduce its opium production, whilst China would make good from year to year the deficit of Indian opium revenue, on a sliding scale which was to terminate after a certain period, when the whole area, originally devoted to opium plantations, would have been gradually brought under cereal cultivation, thus preventing any serious injury to the revenues of India. In direct connection with this scheme of the Viceroy, there was a further project, devised in Hongkong by Mr. Ho Amei, but contemptuously rejected by Sir John. Mr. Ho Amei proposed to start in Hongkong, under the sanction and control of the Chinese Government, a Company with a capital of twenty million dollars, for the purpose of purchasing all the opium required for Chinese consumption sent from India and then distributing it to the various ports. It was supposed that this scheme would make smuggling impossible, do away with the necessity for the numerous existing Li-kin stations and put a stop to the prevailing evasion and misappropriation of Li-kin duties in China. But the whole scheme failed because the Indian Government declined the Viceroy's proposal. An equally unsatisfactory result had the project of Mr. Ho Amei, to start at Aberdeen salt-pans to manufacture sea salt for exclusive consumption in the Colony. Ignoring the fact that salt is an Imperial monopoly in China, and that therefore the manufacture of salt in Hongkong would give an immense stimulus to the existing forced contraband trade in salt, to the injury of Chinese revenue and in violation of the friendly relations between the two countries, the Chamber of Commerce (March 10, 1881) viewed the proposed manufacture of salt in opposition to the Governor's views as an enterprise as legitimate as that of refining sugar. Sir John would not ​entertain the scheme for a moment. A fifth project of the Chinese community was the establishment of a Chinese Chamber of Commerce, which was to take over all the extraneous functions of the Tung-wa Hospital Committee. Sir John encouraged this project and suggested to combine with the Chamber of Commerce a Chinese Industrial Museum. The plan was often discussed, petitions and deputations pressed it upon the Government, year after year, but although the Governor finally (February 20, 1880) promised to recommend a Government grant of $10,000, in addition to the grant of a piece of ground, nothing was really done.
The sanitation of Hongkong was, during this administration, a subject fruitful of bitter strife, as it brought the Surveyor General, the Colonial Surgeon and the Military Medical Authorities into direct opposition against the views of the Governor. The annual reports of the Colonial Surgeon for the years 1879 and 1880 having been suppressed by the Governor, our records are incomplete. However, the Registrar General's statistics of the annual death-rate per 1,000 of the whole population (being 26.81 for 1877, 29.60 for 1878, and 32.14 for 1879) show a steady increase for the first three years of this administration, followed by a considerable decrease in 1880 (28.71) and 1881 (24.07). As no material changes were made in the system of sanitation, it seems that the rise and fall of mortality during those years had nothing to do with the Governor's attitude towards, or inactivity in matters of sanitation. The increase of sickness in 1877 is accounted for by meteorological conditions, the heat registered during that year having been in excess of anything experienced during the preceding eight years, while the rainfall (77.24) was below that of previous years (104.02 in 1876). As to the year 1878 shewing a rise in the mortality tables, the Colonial Surgeon reported that the health of the Colony was exceptionally good in 1878, and during the year 1879, when the mortality among the Chinese population rose to 33.11 per 1,000, the health of the troops was even better than in 1878. The common practice during this period was, when things sanitary were found fault ​with in Hongkong, to lay the blame on the Governor. Owing partly to the annual philippica of the Colonial Surgeon, who asserted that large numbers of Chinese houses in Hongkong had been rebuilt on plans wanting in all sanitary principles, as they drained mostly into the subsoil, and principally on account of the trenchant representations, regarding the alleged mismanagement of sanitary affairs in Hongkong, made by Deputy Surgeon General McKinnon to the War Office, the Secretary of State sent (June, 1881) Mr. O. Chadwick, C.B., at the expense of the Colony, to inquire into and report to the Colonial Office on the sanitary condition of Hongkong. Apart from the prejudice in favour of the dry earth system which the Governor had, the only branch of sanitation, in which he positively interfered, was the working of the C.D. Ordinance, and in this respect also the Governor's action ran counter to the views of the local sanitary authorities. Sir John appointed (November 12, 1877) a Commission (T. C. Hayllar, W. Keswick, E. J. Eitel) to inquire into the working of Ordinance 19 of 1867. But beyond abolishing the most glaring abuses which had connected themselves with the local system, and bringing together a mass of information as to the local history of this branch of sanitation, the Commission produced no result.
In educational matters, the real good, which Sir John did for the education of the youths of the Colony by a reform of the Grant-in-Aid Scheme, escaped public attention almost entirely. As regards the Government Central School, then the most popular educational institution of Hongkong, there appeared (December 1, 1877) a pamphlet questioning the raison d'être of this School. The anonymous author argued that the Government should confine its operations to promoting elementary education, leaving all higher education to be organized on the voluntary principle and to be paid for by those who value it. The pamphlet was believed to express the Governor's views and caused accordingly disquieting apprehensions. The Central School, however, continued as before. What the Governor did for, or against, the School, had practically no effect at all, except that the erection ​of new buildings was stopped. On the ground that political and commercial interests rendered the study of English of primary importance in all Government Schools in the Colony, a principle which an Educational Conference (February 25, 1878), appointed by the Governor, strongly enunciated, the Governor urged (but without effect) that more attention should be paid in the Central School to promoting the speaking of English, that attendance at Chinese lessons should be made optional, and that smaller classes and a larger staff should be organized. An attempt which the Governor made, by the appointment (August 27, 1880) of an Education Commission (F. Stewart, E. L. O'Malley, J. M. Price, Ph. Ryrie, W. Keswick, E. J. Eitel, E. R. Belilios), to substitute five elementary district schools for the preparatory classes of the Central School, and to convert the latter into a Collegiate Institution, miscarried entirely. A Normal School, for the training of Chinese teachers of English, was established (September 1, 1881) but was condemned by the Education Commission. The separation of the offices of Headmaster of the Central School and Inspector of Schools, the appointment (March 7, 1878) of a separate Inspector as Head of the Education Department (E. J. Eitel), and the revision of the Grant-in-Aid Scheme (1879) met with no opposition. The latter measure revolutionized the educational system of the Colony. By a few verbal alterations in the Grant-in-Aid Code, approved by the Secretary of State, the secular system was confined to the Government Schools, whilst all the Grant-in-Aid Schools were set absolutely free to devote their whole time to education (whether secular or religious) in both primary and secondary subjects. The consequence was that, whilst Sir J. Pope Hennessy on his first arrival in Hongkong (in 1877) found 41 schools reported as existing in the Colony, with 2,922 scholars, he left behind him, on his departure from Hongkong (in 1882), 5,182 scholars enrolled in 80 schools under Government supervision.
The Roman Catholic community had St. Joseph's Church re-opened for services (June 3, 1877) and a new Church, of the Sacred Heart, at Westpoint, built for them (March 22, 1879) ​on ground granted by the Government. The German community erected a Lutheran Church (March 12, 1879) in connection with the Berlin Foundling House. The first Chinese civil marriage was solemnized at the Registrar General's Office on 7th June, 1877. The Sunday labour question was brought before the Government (May 1, 1879) by the joint action of the Protestant and Catholic clergy. A Memorial presented by them requested, that on Sundays all labour should cease in the Colony and that Statute 29th of Charles II. should be put in force. The question was referred to the Secretary of State, but Sunday labour continued in Hongkong unchecked.
Such was the mutual incompatibility of temperament, views and ways, between Sir John and the European community, that he deliberately assumed a position of entire isolation, whilst the European community felt, year by year, less and less disposed to disturb his insularity. Apart from Sir John's general policy, there were special causes which irritated the community. Such were, for instance, his interference (October 24, 1879, and February 5, 1881) with the rules of admission to the City Hall Museum, his attempt to confiscate the steam-tug Fame (October 28, 1879), and his prohibition of the sale of refreshments at the City Hall Theatre (February 25, 1880). As regards amusements, however, the community was, during this period, well provided for. In addition to the established periodical treats provided by the Amateur Dramatic Corps, the Choral Society, the Horticultural Society, the Victoria Recreation and Regatta Clubs, the Liedertafel of the Club Germania, and the Race Club, this period is distinguished by some specially successful celebrations, among which mention is due to St. Patrick's festival (March 17, 1879), the centenary of the birth of the Irish poet Tom Moore (May 28, 1879), the Masonic Ball of 15th January, 1880, the anniversary of Washington's birthday (February 23, 1880), and the tercentenary of Camoens (June 10, 1880). As to other social events those deserving mention are the semi-extinction of the Humane Society (May 13, 1878), the formation of St. John's Lodge under the Scottish Constitution (November 30, ​1878), a banquet and presentation of an address in honour of Professor Nordenskjold (November 3, 1879), the starting of jinrikshas in the Colony (April 22, 1880), the establishment of a Polo Club (April 27, 1880), the presentation of an address and testimonial to the Hon. W. Keswick (May 14, 1881), the arrest of Messrs. Rapp and Schmidt by a Customs cruiser while on a shooting expedition (November 20, 1881), and the appointment of Mr. C. P. Chater as Masonic District Grand Master of South China (February 2, 1882).
The charity of the Hongkong community was, during this period, called forth and exercised to an extraordinary degree. To the relief of the famine in North China the Hongkong community contributed (from April, 1877, until August, 1878,) an aggregate sum of $132,000. Floods in Canton necessitated (in May, 1877) a separate appeal which in a day or two produced $5,000. The Freemasons raised separately funds (October, 1877) for the relief of sufferers from famine in India, and in January, 1878, a subscription was started for the sufferers from the Yesso explosion, when Messrs. Douglas Lapraik & Co. headed the list with a subscription of $10,000. An Amateur Concert was given (December 12, 1878) on behalf of sufferers by the failure of the City of Glasgow Bank. An Irish Famine Relief Committee was started (March 8, 1880) and collected $36,000. The Hon. E. R. Belilios having (October 15, 1878) placed in the Governor's hands the sum of £1,000 for the erection of a statue of Lord Beaconsfield, used this sum, when Disraeli deprecated the honour,, to establish a Medical Scholarship Fund (October 7, 1879), subsequently changed (November 29, 1883) into the Belilios Scholarship Fund, and gave to a row of houses opposite the City Hall, which he erected at the time, the name Beaconsfield Arcade. A Medical Mission Committee (J. C. Edge, Dr. Young, and H. W. Davis), having, since October 1871, established a public dispensary in Taipingshan, made (January 13, 1872) an appeal to the community and commenced taking steps which ultimately resulted in the establishment of Alice Memorial Hospital.
​Several gales passed over Hongkong in 1870 (10th July, 13th July, 10th October), one in 1880 (23rd September) and two in 1881 (21st August, and 14th October), but with the exception of the last gale, by which many small craft were wrecked and some lives lost, these gales did no serious damage. Besides the case of the China Merchants' Steamer Haishin, which went ashore in Fat-tau-moon, opposite Sheko, there was but one extraordinary disaster. The S.S. Yesso was being moored alongside the wharf, when one of her boilers burst (November 22, 1877) and 87 persons were scalded to death. There was no unusual number of conflagrations during this period, but the average number of houses destroyed on the occasion of fires was much greater than anything previously experienced, indicating a defective condition of the Fire Brigade.
The history of the ship-building movement during this period is characterized by keen competition, ending in the triumph of the H. & W. Dock Company. The most prominent landmarks in this struggle were the launch of the Customs cruizer Li Chi from Captain Sands' slip at Westpoint (March 5, 1878); the launch of the S.S. Kiungchow built by W. B, Spratt & Co. (July 28, 1878) at Spring Gardens; the launch of the S.S. Zephyr from Captain Sands' slip (November 23, 1878); the purchase of the late Captain Sands' slips by the H. & W. Dock Company (September 1, 1879); the starting of opposition Docks at Shamshuipou by the Cosmopolitan Dock Company (February 3, 1880), and the purchase of these Docks by the H. & W. Dock Company (December 31, 1880). As to other local industries, there is to be recorded the establishment of an iron foundry at Shaukiwan (June 6, 1878), the attempt made by the Kaiming Company to start a match factory at Yaumati (June 15, 1880) and the registration (December 31, 1880) of a new Ice Company. On 1st April, 1877, postal rates were reduced (to 16 cents for a letter to England) and local rates lowered by one half. A further reduction in postal rates (to 10 cents for a letter to any country of the Postal Union) was made in 1879, when an almost uniform postal tariff was ​introduced, and an exchange of money orders arranged with India and most of the Australian Colonies. Telegraphic cable connection was extended to Manila (May 1, 1880) and to Canton (March, 1882), whilst the town was provided with telephones, there being on one occasion (June 24, 1881) three Telephone Companies applying for permission to establish lines in the Colony. A short-lived line of steamers was started (January 13, 1878) to connect Hongkong with Peru; the S.S. Washi commenced to run regularly between Hongkong and North Borneo (June 13, 1878); the Mitsu Bishu Company started a new line of connection with Japan (October 12, 1879), and the Austro-Hungarian Lloyds extended their steamship traffic by bringing Hongkong into regular monthly connection with Triest (April 1, 1881). To the foregoing evidences of prosperity may be added the establishment of an Anglo-Chinese Debating Society (March 4, 1880) and the starting of a third daily newspaper, the Hongkong Telegraph (June 15, 1881), by Mr. R. Frazer Smith.
The obituary of this period includes an extraordinary number of prominent citizens:—H. Thorburn, Acting Manager of the Chartered Bank (April 19, 1877); W. H. Bell, lessee of the Daily Press (May 16, 1877); Captain G. U. Sands, founder of the Patent Slip and Dock Company (October 28, 1877); J. J. dos Remedios, Consul General for Portugal (July 30, 1878); John Jack, proprietor of the Hongkong Distillery (August 15, 1878); Hon. Ch. May, Colonial Treasurer (April 23, 1879); Captain E. Punchard, commander of coast steamers (July 12, 1879); Rev. H. H. Kidd, Colonial Chaplain (July 31, 1879); Hon. C. B. Plunket, Police Magistrate (December 21, 1880); Captain R. W. Hutchinson, commander and owner of several steamers (January 30, 1881); Mrs. McIver, wife of Superintendent P. & 0. Company (February 11, 1881); Sir Richard Graves McDonnell (March, 1881); T. G. Lindstead, Masonic District Grand Master (April 30, 1881); W. R. Landstein, merchant (June 21, 1881); Pastor Klitzke of the Berlin Foundling House (July 3, 1881); Rev. C. G. Booth, Military Chaplain (January 14, 1882).
​In October, 1881, it was stated that the question of the Governor's rule or misrule would shortly be brought before Parliament. This was not done, but in February, 1882, it was generally understood that the Governor was about to leave the Colony for good. The Tungwa Hospital Committee gave the Governor a farewell banquet (February 27, 1882), and when Sir John, after a stormy debate in Legislative Council, announced (March 1, 1882) his approaching departure, the Hon. Ph. Ryrie, expressing his own views, praised the Governor as having been a longer time at his post than any of his predecessors. Two complimentary addresses were presented to Sir John on the eve of his departure, one by a Chinese deputation and the other by the Portuguese community (March 6, 1882). On 7th March, 1882, Sir John left Hongkong ostensibly on leave for six months, but it was understood at the time that his return was beyond the bounds of probability. Later on, when a contrary rumour reached the Colony, the strongest remonstrances were addressed by the leading British merchants to the authorities at Downing Street and thereupon all doubts as to the permanent severance of the tie between Hongkong and Sir J. Pope Hennessy (beyond the payment of a pension) were removed, and the Colony entered, after five years of incessant turmoil, upon a season of quiet and steady work. Sir John himself carried with him to another Governorship (Mauritius) the same odd perverse antipathies, and roused there also, among the British community, the whirlwind and the storm which it required the interference of Sir Hercules Robinson to assuage. The abrupt termination of Sir John's official career was rendered tragic through its being followed by his premature death (October 7, 1890) at a moment when re-entrance upon the scenes of Parliamentary life seemed open to him and to offer a vista of success in the sphere of Irish politics. Requiescat in pace.