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including those of 52 women and 19 children were recovered of persons who had sought but failed to find safety by jumping into the water and the charred remains of 19 others were found on board while 2 persons died in hospital from injuries received. A valuable cargo was lost and the whole interior of the ship destroyed. The cause of the fire was not definitely ascertained but is believed to have been a coolie smoking on a heap of matting on deck,

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Apart from these calamities various occurrences outside the Colony tended to make the year a bad one for trade. Piracy in the waterways leading to Canton was rife culminating an attack on the British Steamer Sainam of 349 tons belonging to the Hongkong, Canton and Macao Steamboat Company, which took place on the evening of the 13th July near Sam Shui on the West River when the ship was on her way from Canton to Wu Chow. In this attack the master and several Indian watchmen belonging to the ship were wounded and a missionary-the Revd. R. J. J. MACDONALD, M.D.,-killed. The Chinese authorities stimulated by H.B.M. Consul-General at Canton showed some vigour in detecting and punishing the persons engaged in this outrage but the problem, in which the mercantile community of the Colony took an active interest, of how to prevent the occur- rence of similar incidents in the future had received no solution by the end of the year.

Bad as were the effects on trade of the insecurity of the waterways far greater evils resulted from the direct action of the Canton authorities in issuing from the provincial mint vast quantities of subsidiary coins containing about 10 per cent. less silver than the dollar of which they purported to represent fractional parts. This over-issue, bringing down the value of stocks of similar coins already in the country by about 5 per cent. greatly reduced the purchasing power of the Kwang Tung consumer of foreign goods. It incidentally brought down the dollar value of the Hongkong subsidiary coins to the inconvenience of various trading concerns in the Colony and of its Government who were unable to get rid of a large stock of this coin purchased in the preceding year and had eventually to return $3,398,000 of it to England for sale as bullion. The Hongkong Government decided as a result of this lesson to eliminate from their future financial policy the idea of making profit from the supply of subsidiary coins to the two Kwang Provinces and then took steps, which since the end of the year have had some result, to impress on the Government of those Provinces the imperious necessity for checking the output from the Canton mint.

Other matters outside the Colony adversely affecting its prosperity were the failure due to floods of the first rice crop in the neighbouring provinces of China and the continued. appreciation of silver.

In the China trade of Hongkong and as regards imports very heavy losses had to be faced at the end of the year owing to the large stocks of Indian yarn which were held at prices above their true value. Neither in Manchester, fancy or woollen goods was business satisfactory and in metals it was dull. Importations of Australian flour continued to in- crease largely. Exports did not do so badly. There was a good yield of silk ad fair demand for it and native dealers were satisfied with the results of the year as regards finger and soy..

The rise in the Sterling value of the dollar which has been going on since early in 1903 continued in 1906, the range of variation in the yea, being slightly greater than in 1905. At the commencement of January the dollar stood at 2017. It fell to 2s. Oftd. for a short time at the end of that month and again at the end of February, rose irregularly to 28. 31d. in the middle of November and was worth 2s. 31d. at the end of the year. The maximum of the year was the highest value that had been attained since the end of 1893. The rise is said to have involved some withdrawal of capital from the Colony for investment in gold using countries and consequent depreciation in the value of local stocks.

Certainly those stocks dealt with in the Colony which give the best indication of the state of its business decreased considerably in value during the year. The shares of four land companies went down on an average over 10% while those of the Hongkong and Whampoa Dock Company, Limited, in spite of business brought by the typhoon, fell nearly 12% and of the Hongkong and Kowloon Wharf and Godown Company 13%. The shares in nearly every industrial undertaking, including the two sugar refineries, the Cement Com- pany and the Rope Manufacturing Company shrunk in value.