14. The whole trade in Junks arriving from l'orts outside the Colony amounted last year to 26,500 vessels and 1,798,788 tons, being 1,186 vessels und 71,332 tons in excess of the arrivals in 1876. In view of the auch greater facilities offered by the conveyance of goods and passengers in vessels propelled by steam it is surprising to find the trade in native bottoms on the increase. I attribute some of the apparent increase to the having constituted Yau-má fi in British Kowloon an Outstation. It was inconvenient to send rowing boats across the harbour to board every Junk arriving Yau-má Tí, and it would have been hard, seeing the important station that place has become, to compel Junk Masters anchored off Yau-má Tí, to come over to Victoria to report. With the increased facilities given to Junk Masters for reporting, more correct records of the arrivals and departures are kept.

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15. The all important subject of the so-called blockade of the Colony by vessels belonging to the Chinese Government is a matter that I approach with great delicacy. It was the general opinion, and I shared in that view, that the blockade would have a tendency to check the trade and consequent prosperity of the Colony; but, in the face of the figures which these returns exhibit, and which are enlculated year by year with much care, I am unable any longer to see that the effect of the blockade has been so detrimental as it was thought it would be. Grievances which at one time were continually cropping up have, in great measure, ceased; and the honest trader does not now seem to be interfered with more than is necessary to protect the Chinese revenue.

16. The Junk trade was at its minimum in 1867 and 1869. It then steadily increased until 1872, after that there was a falling off until 1875, and since the latter year the trade has continued to improve. 17. Reports have reached me of the seizure of small boats carrying salt, but on enquiry it has been found that these vessels have been captured in Chinese Waters while endeavouring to evade the payment of the salt tax.

These boats of about 300 piculs (18 tons) leave-Yau-má Tí generally—with a farger number of men than vessels of their size require for purposes of navigation. The men are well armed and prepared to fight their way; and, being such, are a class of persons not deserving of encouragement.

18. The following complaint reached me in December last. The Master of the trading Junk Kucok-tak-wo cleared at this Office in the usual manner, and left the Gunpowder anchorage on the 30th November, laden with 2 cases of Cartridges, 100 cases, and 200 kegs of Gunpowder for conveyance to Macao. The boat was stopped at the Kap-shui-mün Pass, and the Master ordered to return to Hongkong where he re-deposited his carge. On enquiry I ascertained that the Vice-Roy of the Qwang-tung Province had on the 17th November given instructions, that the Authorities at that Pass were not to allow any vessels having Gunpowder and such like articles on board to proceed, unless the Master of the vessel had a document signed by the Governor of the place of shipment, certifying that the Gunpowder was being legally exported. This complaint is under the consideration of His Excellency the Governor.

EMIGRATION.

19. Under this lead there has been a decrease of 6,609 Chinese emigrants, chiefly due to the opposition shewn by the State of California to the further introduction of Chinese labour into that State. There is a decrease of 4,472 on the number emigrating to California in 1876.

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9,562 Chinese left Hongkong for San Francisco, while 7,130 returned from that place during the

Portland in Oregon has however taken 1,083 Chinese, being an increase of 168 on 1876.

20. The Government of Queensland have passed an Act by which the emigration of Chinese to that Colony has, since May last, virtually ceased. The total number of Chinese leaving for Cooktown from 1875 to 1877 inclusive was 20,960, and the number of Chinese returning during the same period was 6,193, leaving 14,767, less loss from Ordinary casualties.

21. Port Darwin in the Northern territory of South Australia received 97 Chinese during the year, and it is probable that more Chinese will be required, the climate, as in Queensland, being well adapted for the introduction of Chinese labour.

22. There is a decrease of 1,940 Chinese to Manila, as also a decrease of 1,225 Chinese to the Straits Settlements.

23. A Contract has been entered into between the Peruvian Government and Messrs. Olyphant Co. of this place for the introduction of free Chinese labour into Peru; but the question as to, whether the emigration shall be of emigrants from China embarking at Hongkong for their destination, or, embarking direct from Chinese Ports, is not yet decided, and the matter is occupying the attention of this and the Imperial Governments.

24. 1,102 Chinese emigrants proceeded to the Sandwich Islands in 1877, being 16 less than the number that left in 1876. A demand has however arisen for a much larger number of Chinese abourers for those Islands. The Government in the view of this demand is instituting enquiries into the condition of the labour laws of the Sandwich Islands, and in the meanwhile emigration to Honolulu is in abeyance.

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