europe-in-china — Page 17

defeated for the time by Sir Richard, before the Chamber of
Commerce made any move in the matter.
But the principal tussle Sir Richard had with the Chinese
Authorities was connected with a much more serious attempt
made by the Mandarins to ruin the native junk trade of
Hongkong. About October 15th, 1867, the steam-cruizers of
the Canton Customs, aided by native gun-boats employed by the
holders of Chinese monopolies at Canton (especially the salt and
saltpetre farmers) , commenced what was thenceforth known as
the Blockade of Hongkong. These steam-cruizers and gun-boats
patrolled day and night every outlet of the harbour and waters
of Hongkong, boarded and searched every native junk leaving
or entering, arrested every junk that had no proper papers and
levied double duty in the case of goods shipped at Pakhoi or
Canton for other Treaty ports by junks which en route touched
at Hongkong. It was a movement which pretended to aim only
at suppressing smuggling but which, in reality, operated as an
416 CHAPTER XIX.

extra tax on the legitimate junk trade of Hongkong. It served ,
indeed, to induce Chinese merchants in Hongkong to conduct
their shipping business in foreign bottoms (exempt from this
blockade) rather than by native junks, but, as foreign vessels
were excluded from all but Treaty ports, this blockade tended
to nullify the right of Chinese subjects residing in Hongkong to
trade, by native junks, with the non-Treaty ports of their own
country. In fact, this blockade served not only as an efficient.
check on smuggling, but as a simple means of compelling the
junk trade of the Colony to pay double duty unless conducted
via the two principal ports of South- China, Pakhoi and Canton.
And this was the real purport of the measure to effectually
subordinate the native commerce of Hongkong to that of Canton
for the injury of the former and the benefit of the latter port ,
and permanently to neutralise, so far as the junk trade of
Hongkong was concerned, the freedom of the port .
It was a clever scheme, this blockade of Hongkong. And
the credit (or discredit ) of having devised and suggested it,
and demonstrated its justification on the basis of international
law, to the great delectation of Viceroy Jui, belongs to the
British Consul of Canton, Mr. D. B. Robertson, on whom, as
the irony of fate would have it, H.M. Government bestowed the
honour of the knighthood. This was meant as a reward for
his subservience to the short-sighted pro-Chinese policy of the
Foreign Office, which Sir Rutherford Alcock initiated in China
but which in this case served to give to the prestige and
prosperity of Hongkong the heaviest blow it has ever received
at the hand of its enemies .
In the face of the support thus given, by H.M. repre-
sentatives in China, to the blockade of the port, Sir Richard
could not do much beyond protesting against a measure which,
at best, combined summum jus with summa injuria. He ascer-
tained, however, that the measure, as originally formulated
(July 1 , 1868 ) , aimed at levying, on Chinese shipping resorting
to Hongkong, a special war-tax, called Li-kin, which amounted in
the case of opium to taels 16 per chest, and that this Li -kin
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 417

tax was to be collected outside the harbour of Hongkong , at
Kapshuimoon in the west, at Kowloon city in the north, and
at Fattauchau , just outside the Lyeemoon in the East . When
Sir Richard discovered that these blockade stations levied , in
addition to the fixed tax on opium which he did not object to ,
also undefined duties on goods of all sort (foed stuffs excluded )
when carried by native junks, he pressed the Chinese Authorities
for a copy of their tariff. But they neither could nor would fix
a tariff, as various monopolies farmed out and sublet to individuals
were mixed up in the matter with provincial and Imperial
interests, and as it suited the interests of a corrupt system of
irregular levies better not to be tied down to a fixed tariff. Sir
Richard then strengthened his water police force and obtained
a steam launch, Blanche, to assist the Colonial junk or gun-boat,
Victoria, in patrolling the waters of Hongkong to prevent
trespass . Moreover, he refused to allow any Chinese gun-boat.
or cruizer to anchor in the harbour unless flying a recognized
official flag. The Chinese Authorities yielded this point and
adopted first a triangular flag (October, 1868 ) , then provisionally
a square (March 19 , 1869 ) , and finally a yellow triangular flag
with the emblem of a flying dragon.
The interference with the legitimate native trade in foreign
goods, resulting from the Customs Blockade of Hongkong,
aroused a considerable commotion in the Colony. A universally
signed protest, in form of a Memorial to the Secretary of State,
was presented to the Governor (July 20, 1868 ) . Fresh ex-
citement arose when it became known (July 24, 1868 ) that the
Viceroy of Canton had opened in Hongkong an opium tax station
in charge of a well-known resident (Ho A-loi) and when a salt
revenue station and other offices, opened in town by the officers
of the Li-kin stations, were discovered, disclosing a regular
organisation intended to collect in Hongkong all the various
taxes demanded at those stations and to issue passes in Hongkong
under the seal of the Chinese Government. Sir Richard im-
mediately suppressed every such office that was discovered. On
February 15th, 1869, the Assistant - Harbourmaster (A. Lister)
27
418 CHAPTER XIX.

reported that 6
certain branches of commerce had not yet
recovered from the panic into which they were thrown by the
attempt , in October and November ( 1868 ) , on the part of the
Canton Customs to stop the whole trade in foreign goods by
Chinese bottoms to any other place than Canton .' The Harbour-
master's report for 1869 shewed a falling off of 2,222 junks ,
equal to 113,252 tons, owing to the blockade . But after a few
years the Chinese merchants , recognizing the helplessness of the
case, and the retribution awaiting them if they made any
complaints , submitted to these oppressive exactions and found
it to be to their own interest and convenience to obtain passes
in town, at the secret taxing offices which continued to flourish
on the sly, rather than risk the delay and uncertainty of payments
made at the outside stations .
That this blockade scheme aimed at destroying the freedom
of the port as well as the junk-trade of the Colony, appeared very
clearly from a proposal, which originated with one of the
Commissioners of the Chinese Customs Service ( Th. Dick) , but
which was sternly rejected by Sir Richard. It was proposed,
that an export duty should be levied in Hongkong, by a Branch
of the Chinese Customs Service, upon the opium (and in course
of time, no doubt, upon all other goods) re-shipped in Hongkong
by junks, the Colony retaining a certain portion of the revenue
as commission for so collecting it . The strongest opponent of the
blockade was the Hon. Ph. Ryrie who, as chairman of the Cham-
ber of Commerce (September 12, 1871 ) , stated that there could
be no question as to the illegality of the action taken by the
Chinese officials which, in point of fact, almost amounted to an
act of armed hostility against the Colony. Mr. Ryrie strongly
protested against the inaction of the Home Authorities in this
Imperial question . He also caused the publication of a letter
addressed to the Chamber by Baron de Meritens, formerly a
Commissioner of the Chinese Customs, stating-that arresting,
on the high seas, vessels leaving Hongkong was contrary to the
law of nations, that the Viceroy was acting with reluctance under
orders sent him from Peking, that Sir Richard's objections
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 419

continued in all their force, and that the appointment of a
Chinese Customs Collector (or Consul) in Hongkong, who would
certainly act as a spy, would be subversive of the independence
of the Colony. But in spite of the Governor's opposition to the
blockade, and notwithstanding repeated Memorials presented
to H. M. Government by the community and the Chamber of
Commerce, the working of those Chinese blockade stations
continued and constituted thenceforth a chronic source of
discontent ever wrangling in the minds of both native and
foreign merchants.
Another important diplomatic question arose in connection
with those Li-kin stations. In passing through Hongkong
(December, 1869, and January, 1870) , Sir Rutherford Alcock,
then H.M. Minister in China, urged the members of the Chamber
of Commerce to submit to the appointment of a Chinese Consul
in Hongkong. This measure he declared to be the only satis-
factory solution of the difficulties standing in the way of a
fulfilment of the popular desire for an abolition of the Li-kin
stations in the immediate vicinity of Hongkong, and the only
means of bringing about a permanent arrangement of commercial
relations, between the Hongkong Authorities and the Chinese
Government, such as would rest on a solid basis of mutual respect
and reciprocal advantage. Sir R. Alcock, who was in this matter
the innocent dupe of the cunning Viceroy, and who did not
disguise his monstrous opinion that Hongkong is confessedly a
great smuggling depot,' failed to convince the colonists that 6the
appointment of a Chinese Consul in Hongkong would simply
protect that commerce in the Colony which is legitimate and
discourage that which is contraband . ' The subsequent history of
the blockade shewed that Sir R. Alcock had entirely misconceived
the policy of the Chinese Authorities, who had no intention of
withdrawing their Customs stations in response to any concession
whatsoever. Sir R. Alcock's suggestion, made by him after several
interviews with the Viceroy (December 27 and 29, 1869) , and
with the approval of the latter, that at first a foreign officer of
Sir R. Hart's staff should be appointed Consul in Hongkong,
420 CHAPTER XIX.

until Chinese officers could be educated in the duties and extent
of Consular power, did not remove the radical objections which
the colonists almost unanimously entertained against the proposed
measure. These objections, which Sir R. Alcock denominated
' fears more or less chimerical and exaggerated,' were embodied
by the Hongkong community in a Memorial addressed to Earl
Clarendon (January, 1870), and consisted principally in the
solemn conviction , entertained by Europeans and Chinese alike,
that under existing circumstances the power which a Chinese
Consul would gain over the local Chinese population would
constitute a veritable imperium in imperio and subject the native
community to an intolerable system of official espionage and to
the insatiable rapacity of a corrupt mandarindom. Although
Earl Clarendon sided with Sir R. Alcock on the main points of
the dispute, and sanctioned his concluding with the Chinese
Government a Convention providing for a Chinese Consulate in
Hongkong, Sir Richard, who strongly supported the Memorial
of the community, succeeded in convincing H. M. Government
that the fears of the community were anything but chimerical
and rested on a solid foundation. Although the blockade was
never abated, the question of a Chinese Consulate in Hongkong
remained shelved.
Another diplomatic question agitated for some time (1867 to
1870) the mind of the mercantile community. But Sir Richard
had comparatively little to do with it, as it concerned Sir
R. Alcock (and since 1870 Sir Th. Wade) and the Foreign
Office rather than the Government of Hongkong or the Colonial
Office . This was the question of Treaty Revision which arose
from a provision contained in Article XXVII. of the Tientsin
Treaty making the tariff and commercial articles of this
Treaty (confirmed by the Peking Convention of October 24,
1860) subject, after the lapse of ten years, to further revision
at the request of either of the two contracting parties. Sir
R. Alcock accordingly issued, in spring 1867 , to the British
communities of the Treaty ports in China, an invitation to
forward to him, through their respective Consuls, suggestions as
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 421

to the proposed rectification of any deficiencies of the Tientsin
Treaty. The Hongkong Chamber of Commerce, having received
a similar invitation, resolved (July 16 , 1867 ) to proceed by
memorializing the Governor rather than Sir R. Alcock whom, at'
that time already, they knew to be as unfriendly to the interests of
the Colony as Lord Elgin had been. A Committee, appointed
by the Chamber, presented accordingly to Sir Richard a Memorial
on the illegal transit duties and other exactions imposed by the
Chinese Authorities, in contravention of the Treaty, on British
goods en route in the interior of China. In addition to this
public Memorial, the firm of Jardine, Matheson & Co. presented
(December, 1869) a separate Memorial dealing very frankly with
the regulations of the opium traffic and other grievances . When
it became known, at the close of the year 1869 , that the Chinese
Authorities proposed to include in the revised Treaty Regulations
a provision to the effect that native produce shipped from
Hongkong to a Treaty port should not be protected by the clause
which protected goods, sent inland from Treaty ports, against
inland taxation, the Chamber of Commerce once more (January,
1870 ) memorialized H.M. Government, representing that this
measure placed Hongkong at a great disadvantage compared with
Chinese Treaty ports. However, the whole project of Treaty
Revision had eventually to be dropped.
In spite of the hostile attitude which the Chinese Govern-'
ment during this period assumed towards the Colony, the Chinese
Tartar General (Chang Shan), when visiting Hongkong (October
27, 1871 ) in one of the blockade cruizers (Ping-chau-hoi),
accompanied by two Commissioners of Customs (E. C. Bowra
and Viscomte d'Arnaux de Limoges) was inost honourably received
and most hospitably entertained, in the absence of the Governor,
by the Lieutenant-Governor (W. Whitfield). For the first time
a Chinese gun-vessel saluted, in due foreign style, the port , the
British flag and the Vice-Admiral (Sir H. Kellett) and received
the corresponding salutes in Hongkong.
In May, 1868 , Sir Richard, who had no diplomatic con-'
nection with any other foreign power, received at the hands of
422 CHAPTER XIX.

special Annamese ambassadors, sent to Hongkong for the purpose,
the thanks of the native Government of Cochin-China for his
humane intervention, made on their behalf with the Government
of Macao. In May, 1867 , it had become known in Hongkong
that a number of Cochin-Chinese junks, conveying tribute to
Annam, had been captured by Chinese pirates who sold the
tribute bearers, with their escort and junk crews, to Macao coolie
barracoons. Thanks to the intervention of Sir Richard , these
people were forthwith liberated by the Portuguese Governor
(Admiral de Souza) and the Hongkong community readily sub-
scribed the funds required to send the unfortunate captives back
to their native country.
Sir R. MacDonnell did not materially modify or augment
the organisation of the Civil Service . But, with a view to
retrenchment, he repeatedly applied, when suitable vacancies
occurred, the principle of plurality of offices. One characteristic
of his regime was the preference he invariably gave to those
Cadets whom he found serviceable for the aims of his vigorous
policy and amenable to his austere discipline which required ,
however, much patience on the part of his subordinates as he
ruthlessly sent back official reports, to be amended, again and
again, till they agreed with his views. Another feature of his
administration was the increased authority and importance with
which he invested the Registrar General's office, so long as the
first of the Cadets ( C. C. Smith), who in most things was his
right-hand man, held that office. The number of Cadets had,
before his arrival, been increased (August 9, 1865) , by the
appointment of Mr. A. Lister and Mr. J. Russell, and they were
without much delay employed by him to fill important offices,
the former being sent to the Harbour Office and the latter, who
also acted as his Private Secretary, to the Magistracy.
The first popular measure introduced by the Governor was
a revision of the constitution of the Legislative Council . The
need for such a revision had made itself felt both by the Colonial
Office and by the community when the Colonial Treasurer
(F. H. Forth) had to be censured (March, 1866 ) under the
 THE ADMINISTRATION OF SIR R. G. MACDONNELL . 423

then already existing rules, for having seconded (September 23,
1865) a motion of an unofficial Member (Th. Sutherland) to
the effect that the item of $92,000 for the Military Contribution
be struck out of the Estimates until the profits of the Mint
are in excess of the amount required . There being only three
unofficial against seven official Members in the Council, the
community argued that, as official Members were thenceforth
compelled either to resign or to vote in favour of every
Government measure, the unofficial Members were virtually
powerless unless the constitution of the Council was modified
to suit the new rules . On the first opportunity (August 27,
1869), Sir Richard gave to Mr. Rowett a seat vacated by
Judge Ball, so that there were then on the Council six officials
and four members of the community ( H. B. Gibb, W. Keswick,
J. B. Taylor, R. Rowett) beside the Governor who had, however,
both an ordinary and a casting vote.
Sir Richard was at all times well able to keep his Council
in hand, and the Registrar General (being on the Council in
some acting capacity or other) ably seconded him in the task.
Sir Richard was an excellent speaker and keen debater, always
terribly in earnest and thoroughly master of whatever subject
he took up, and to this was added the weight of his stern
personality and a fixed determination to conquer every obstacle.
He had but one encounter with the unofficial Members when
they, led by the Hon. W. Keswick (September 30, 1869 ) , boldly
attacked the Governor's creation of a special savings and excess
account. They protested against a manipulation of the public
accounts, seemingly intended to enable the Governor to expend
public money without the knowledge and consent of the
Legislature. The Hon. C. C. Smith, then Acting Colonial
Secretary, argued, however, that so long as money voted by
the Council was applied to the same kind of object as that for
which it was originally intended, it was immaterial whether
the particular object on which it was spent had been mentioned
in the vote or not. A few years later, during the absence of
the Governor, the Hon . Ph. Ryrie entered into a positive
424 CHAPTER XIX.

conflict with the Government. Having heard that an important
document, bearing on the blockade question, had found its way
from the office of the unpopular Registrar General (C. C. Smith)
into the hands of the Chinese Customs officers, Mr. Ryrie
(September 22 , 1871 ) asked in Council for information on the
subject. Mr. C. C. Smith, then sitting as Acting Colonial
Treasurer, treated Mr. Ryrie's remarks as involving a charge
against himself and retorted with some vehemence. Mr. Keswick
supported his colleague by criticizing the plurality of the
Registrar General's functions and demanded that the duties of
his office should be defined . At the next meeting (October
18, 1871 ) the discussion was renewed and some days later the
Colonial Secretary (J. Gardiner Austin) wrote to Mr. Ryrie,
formally calling upon him to substantiate his charge against
the Registrar General. In reply, Mr. Ryrie, who had all along
contended that he preferred no charge but merely asked for
information, now demanded that at next Council meeting a
protest should be heard against the invasion of privilege involved
in requesting him to explain out of the Council room what he
had said in it . At the next meeting Mr. Ryrie gave notice
of his protest but no discussion was allowed . Seeing in the
whole affair an illustration of the old grievance of defective
representation in Council, the public now stigmatized the action
of the Lieutenant-Governor (W. Whitfield) in deferring the
debate, as an unwarrantable attempt to burke free discussion .
On November 15, 1871 , Mr. Ryrie's protest, concerning the
breach of privilege of which he complained, was read in Council
and recorded in the minutes. Mr. Ryrie justly contended that
freedom of speech in Council was absolutely necessary.
Sir Richard's financial measures were the source of both
the greatest trouble and the greatest triumph of his adminis-
tration . For some time before his arrival, the Colony had been
steadily dropping from a state of comparative affluence into
a condition of growing insolvency. At the beginning of the
year 1865 , the Treasury accounts shewed a surplus of assets
(over liabilities) amounting to $298,000 . At the commencement .
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 425

of the next year ( 1866 ) this surplus was reduced to $ 184,000 ,
and in January, 1867 , there was but an imaginary surplus of
$24,000 made up in part by a stock of $60,000 in unavailable
coins (bronze cents and mils) which no creditor could have
been compelled to accept. The Colony was therefore practically .
insolvent. Moreover, the expenditure had for some time gone
on increasing in proportion as the revenues continued to
diminish. In the year 1865, during the interregnum of
Mr. Mercer, the expenditure exceeded the revenue by $ 94,361 ,
and in 1866 , when Sir Richard had just stepped in, by $ 167,877 .
But now a change came. Sir Richard at once reduced the
expenditure from $ 936,954 in the previous year ( 1866 ) to
$730,916 , though not without leaving for a while the Military
Contribution in arrear. At the same time ( 1867 ) the revenue
was permanently raised, by means of Sir Richard's Stamp
Ordinance, which came into operation at the close of the year
(October 9 , 1867 ) . Therewith the finances of the Colony began
to right themselves slowly, though at this very time the
commercial depression, which had made itself felt in 1866 ,
had been much aggravated and the tradal interests of the
Colony were passing through a crisis such as had never before
occurred in the history of the Colony. The expenditure of the
year 1867 was kept within the limits of the revenue to the
extent of $ 128,584 and next year ( 1868 ) to the extent of
$142,794, though in the latter year all the arrears of the Military
Contribution were paid off. The revenue of the year 1868
amounted to the astounding sum of $ 1,134,105 and yielded ,
as the expenditure stood at $991,811 , a surplus of $ 140,000 .
Instead of rejoicing over this result, the mercantile community,
engulfed at the time in a slough of , despond, expressed great-
dissatisfaction at the heaviness of the taxation and pointed with
groans to the yield of the Stamp Ordinance which had taken
$ 101,000 out of the pockets of the merchants in that one year.
The revenue of 1869 shewed an apparent decrease of £ 43,811
as compared with 1868, but in reality there was some increase,.
as credit was erroneously taken in 1868 for £ 55,660 gambling
426 CHAPTER XIX.

revenue which had to be refunded . In 1870 the revenue
decreased slightly (by £ 1,791 ) and somewhat more in 1871
(by £ 14,711 ). But Sir Richard could boast of having so
regulated the finances, that, during a period of unexampled
commercial disasters in China, the Colony emerged from a state
of insolvency to one of assured financial stability, without leaving
a single claim unsatisfied or borrowing a fraction from the
Special Fund which had unavoidably accrued from the gambling
licences.
It has already been shewn that this financial success was
achieved principally by means of the Stamp Ordinance ( 12 of
1866 ) . When Sir Richard first announced (August , 1866 ) his
intention of introducing a Stamp Act, the foreign community
seemed to be rather at a loss, at first, what to think of the
measure. But when the second reading of the Bill was carried in
Council (September, 1866) , one local paper (China Mail) boldly
supported the principle of the Bill, whilst another paper (Daily
Press) opposed it and complained that the Bill was hurried
through whilst the unofficial Members of Council were ignorant of
its contents and bearings. A public meeting was held (September,
1866) and, in pursuance of the resolutions passed, a Memorial
protesting against the confirmation of the proposed Ordinance
was accordingly signed by almost every firm in the Colony.
The principal objections which the foreign community had
against the Bill consisted in the following allegations. ( 1 ) that
stamps would seriously obstruct commerce, a surmise which
subsequently proved unfounded ; (2 ) that the measure was of
such an expansive character as to encourage extravagance on
the part of the Government, an imputation born of distrust
which subsequent events contradicted ; (3) that the incidence
of this form of taxation would fall principally on foreign
commerce, whilst the Chinese would manage to evade it. The
force of this latter allegation, which appears to have been a
correct forecast of the subsequent working of the Stamp
Ordinance, was enhanced by the statement, which was made in
a public paper at the time, that , as things then stood, the
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 427

Chinese community were taxed $4 per head, and the British
and foreign community $250 per head. Although Sir Richard
willingly modified details of the Bill to meet minor objections.
of the community, he failed to give satisfaction, as a strong
majority of the public objected to the Bill in toto. A second
public meeting was held, resulting in the presentation of another
Memorial condemnatory of the whole measure. When it was
announced (early in March, 1867) that H. M. Government
had ratified the Bill, the temper of the community was aroused
and Sir Richard was publicly accused (March 15, 1867 ) of
having induced Lord Carnarvon to believe that the Governor's
arguments had reconciled the community to an impost which,
in reality, was all but unanimously felt to be deeply injurious
to the true interests of the Colony. However, by the time the
Stamp Ordinance came into operation (October 9, 1867) , the
feeling of the community, though maintaining strong objections
to the measure and subsequently re-iterating its condemnation
of it by another public meeting (March 17, 1868 ) , had changed,
so far as the Governor's connection with the Ordinance was
concerned. It was then generally believed that the Stamp-
Ordinance would never have been brought into operation if
the Governor had been allowed free hand in his dealing with
the gambling problem, and that the determination of H. M.
Government to insist, in spite of all arguments and remon-
strances, upon the payment of the Military Contribution, had
made the enforcement of the Stamp Ordinance a matter of
sheer necessity. By order of Sir Richard , several prosecutions
were instituted with a view to compel the Chinese population
to comply, in some measure, with the provisions of the Stamp
Ordinance. These prosecutions, however, served only to
invigorate the general dissatisfaction felt with the working of
this measure. With the exception of receipts to be given to
foreigners, Chinese tradesmen and merchants disregarded the
Ordinance and stamped commercial documents only in cases in
which they apprehended the possibility of litigation. Anxious
to improve the working of the Ordinance, Sir Richard appointed
428 CHAPTER XIX.

(March, 1868) a Commission and invited the public to bring
before that Commission their complaints against the operation
of the Ordinance and suggestions for its improvement. The
Chamber of Commerce accordingly passed (April, 1868) a series
of resolutions which were forwarded to the Commissioners. In
pursuance of their recommendations, the Stamp Ordinance was
subsequently amended (May 23, and November 21 , 1868 ) and
the community, finding eventually that the Ordinance did not
materially injure the prosperity of the trade of the Colony,
became in course of time reconciled with this measure which
has ever since proved to be one of the most important sources
of revenue.
It is necessary in this connection to refer to the measures
adopted by Sir Richard for the regulation of Chinese gambling
houses, as these measures, though originally projected rather
as a solution of an intricate social problem and as a preventive
of corruption in the Police Force, resulted in a considerable
augmentation of the Colony's temporary and special revenues.
The administration of Sir R. MacDonnell is, indeed, specially
distinguished by the fearless attempt he made, in bold defiance
of public opinion and official restraints, to solve the problem .
which had troubled all his predecessors in office, connected with
the well-known Chinese mania for gambling. This national
vice, like opium smoking and prostitution, but more wide-
spread and powerful than either, is rooted in an ineradicable,
because congenital, disease of the Chinese social organism .
Sir Richard was quite right in stating that the passion for
gambling, as observed in European nations, is nothing compared
with the same craving as it appears among all classes of Chinese,
and that in Hongkong it presents, through the corruption of
the Police Force, necessarily resulting from a legal prohibition
of it, a problem which it is easy to ignore but, for a Governor,
imperative to solve in some form or other. It has been
mentioned above that Sir J. Bowring, the first Governor who
recognized the importance of the problem, proposed to deal
with it by licensing, as , in Macao, a few gaming houses and
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 429

enlisting thereby the interests of the licensees in the suppression
of all unlicensed houses. From a remark in one of Sir Richard's
dispatches, it would seem that Sir H. Robinson shared the views
of Sir J. Bowring. But neither of them succeeded in obtaining
the sanction of H. M. Government for so daring an innovation.
Sir R. MacDonnell, before resorting to this policy which he
knew to be not only repugnant to the feelings of H. M.
Government and condemned by several successive Secretaries
of State, but likely to arouse strong opposition on the part of
public opinion in England, did his very best, while sounding
the Colonial Office on the subject of licensing, to purify the
police and to suppress all gambling houses by the strongest
measures of discipline and legislation . As soon as he had,
by personal investigation , ascertained the seriousness and extent
of the evil, and the nature of the difficulties which stood in
the way of its abatement, he set to work to weed the Police
Force of its suspects and to inspire the remainder with a whole-
some terror of his determination to bring to book every defaulter.
For a time the corrupt members of the Force dared not take
bribes and the keepers of gambling houses curtailed their
operations and redoubled their precautions. Sir Richard soon
added legislative to his executive and detective measures . He
had not been many months in the Colony, before he introduced
an amended Registration Ordinance (7 of 1866 ) with many
novel and important provisions. Amongst them was the
application of the principle of vicarious responsibility, making
registered householders responsible for the payment of fines
incurred by residents or lodgers in houses for certain offences,
more especially gambling, but giving householders a remedy
over against the original offenders if they could catch them.
The Chinese householders considered this essentially Chinese
principle a great hardship, and the managers of gambling
associations were so driven into a corner that they offered the
Governor first $200,000 and then $365,000 per annum for a
licence to open a limited number of gaming houses. They
shewed thereby what an immense sum they could afford to
430 CHAPTER XIX.

spend on bribing the Police if measures of repression were con-
tinued. Sir Richard, however, continued his policy of repression
which at first seemed so effective that, on January 7, 1867, he
reported to the Earl of Carnarvon, that the Police Force was
greatly improved, that crime was more rare than it had ever
been, that a prospect was beginning to open of almost
suppressing gambling, that gambling was already diminished
to less than one-fifth of the amount at which he had found it,
that for many weeks past none of the Police had received any
regular allowances from the gambling societies, but that street
gambling still continued, and that, unless the Police continued
their vigilance, the evil would again break out as before.
But hardly had a week passed, after this roseate report was
dispatched, when circumstances came to his knowledge which
caused him to report (January 14, 1867) that the progress
made by the Police in suppressing gambling was not so great
as he had thought . Three months later (April 29 , 1867 ) ,
he had further to report that circumstances had led to a partial
renewal of the old demoralisation among the Police. On May 9,
1867 , Sir Richard found that he had come to the end of his
resources and that he had failed . On that day he informed
the Duke of Buckingham and Chandos, that he now saw no
reasonable grounds for expecting that the Government could
ever succeed in suppressing gambling in Hongkong and that
the present mode of dealing with it (by prohibition) is destructive
of the morals of the Police and ineffective for the purpose sought.
Sir Richard now determined to try the system of licensing
a small number of gaming houses with a view to control gambling
and suppress it by degrees. He had thought of it before. As
early as August, 1866 , he had privately sounded the Members
of Council with regard to the draft of an Ordinance (8 of 1866)
entitled ' for the maintenance of order and cleanliness ' but con-
taining provisions for the regulation (i.e. licensing) of gaming
houses, which, he hoped, would obviate the necessity of resorting
to the Stamp Ordinance then under discussion . This was the
bait offered to the unofficial Members of Council. By their
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 431

taking it, they were deprived of their freedom of action in
relation to both Ordinances. On 28th August, 1866, Sir Richard,
in forwarding to the Earl of Carnarvon the draft of Ordinance
8 of 1866 (for the maintenance of order and cleanliness),
proposed that the Governor in Council should be authorized to
adopt a system hitherto discountenanced by H.M. Government
and derive a large revenue from the alteration.' He added that
· the Members of Council all advocate such change of system

both as a police and a revenue measure.' Instead of sending to
the Governor the reply which had been given to Sir J. Bowring
when he made the same proposal, the Earl of Carnarvon,
admitting that the case of Hongkong was peculiar and justified
exceptional measures, approved of Sir Richard's proposal of
bringing a limited number of gaming houses under the control
of the police, by licensing them, with a view to the eventual
suppression of all gambling . He added, however, one all-
important, and to Sir Richard disastrous, condition, viz. that
the licence fees must not be farmed out but treated as matters
of police and by no means as revenue. Sir Richard forthwith
set to work to remove or circumvent this condition, not
because revenue was his real object but because the Chinese
farmers of the gaming licence would, if paying a heavy
fee. be compelled by their own interests to form a detective
police for the suppression of all unlicensed gambling, and these
detectives would then co-operate with the Police Force for the
arrest and detention of dangerous characters who flock to
gambling houses as moths to the light. Accordingly he informed
the Earl of Carnarvon (January 14, 1867) that it would be
impossible to proceed by any other mode than farming the licence
for establishing gaming houses, because in no other way could
the Government secure Chinese co-operation, and he suggested
to leave to the Governor in Council a discretion to exercise his
powers under the Ordinance as circumstances might render
expedient. As regards the financial aspects of the measure,
which were so distasteful to H. M. Government, he further
stated (May 9, 1867 ) that any pecuniary advantage, which the
432 CHAPTER XIX.

Colony might derive from the change, ought not for a moment.
be regarded as his motive for introducing it, but that a sum
exceeding $200,000 per annum could easily be derived from
that source, and , if the Mint were closed, the Colony would then
be able to resume payment of its Military Contribution and also
to dispense with the Stamp Act.
Meanwhile, however, the Duke of Buckingham and Chandos
had succeeded to the Earl of Carnarvon, and he, while fully
concurring in his predecessor's instructions, abstained from
entering into any discussion of the Governor's arguments, gave
no discretionary power to the Governor such as he sought, and
expressly declined (April 1 , 1867) to sanction the farming system.
Subsequently he specified (July 18, 1867) that the licence fees
should be limited to an amount covering police arrangements
connected with the system. It was on this basis that the Duke
informed Sir Richard ( August 28 , 1867 ) that Her Majesty had
graciously confirmed and allowed the proposed Ordinance (8 of
1866 , now re- enacted as 9 of 1867) for the maintenance of order
and cleanliness.
Now it must be pointed out that, up to July, 1867, the
Hongkong community, though well aware that the Governor
had energetically attempted to suppress gambling and to purge
out corruption in the Police Force and that he had failed, knew
nothing of the Governor's secret discussions with his Council
nor of the sanction given by the Earl of Carnarvon and by the
Duke of Buckingham to the proposed licensing of gaming
houses. Moreover, those paragraphs of Ordinance 9 of 1867
which gave the Governor power to make regulations for the
better limitation and control of gambling ' were so worded that
the uninitiated reader would not suspect, what the Council and
the Secretary of State well knew, viz ., that gambling was to be
regulated and suppressed, by licensing it, under this Ordinance.
As soon as Sir Richard learned by telegraph that Ordinance
9 of 1867 would be confirmed, he disclosed his scheme (July 10,
1867) to the public, arranged forthwith the licensing of eleven
gaming houses (afterwards increased to sixteen) and opened
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 433

them on 15th September, 1867. The revenue from the licences,
distasteful to the Governor himself but an indispensable
concomitant of his scheme, had to be segregated , by order of
H.M. Government, in a distinct Special Fund, which amounted
to $ 155,000 on 23rd May, 1868 , to $221,733 on 28th June,
1869, and to $277,334 on 31st December, 1869. The
Government gaming houses were at first open to all except
women, but foreigners were not allowed to play. After some
time, none but Chinese and Malays were admitted (July 27 ,
1868 ) . Then it became expedient to exclude Chinese servants,
shroffs, cashiers and bill collectors (September 16, 1868 ) . Sir
Richard closely watched the returns of crime and honestly
believed that his system, of providing a vent for the irrepressible
Chinese passion for gambling, was steadily reducing crime in the
Colony. Numbers of dangerous characters, long wanted by
the police or released from gaol and deported on condition of
their never returning to the Colony, were arrested at the gaming
houses . He reported (March 6, 1869) that the good results of
the licensing system included complete extinction of improper
relations between the police and the gambling societies, extra-
ordinary diminution of theft among servants, and effectual aid
given by the licensees in apprehending dangerous characters.
He also demonstrated by statistics that a general diminution of
crime had taken place in the Colony since the opening of the
gaming houses.
The first disclosure of this remarkable scheme (July 10 ,
1867 ) took the whole Colony by surprise. The few Members of
Council, who had been initiated into the secret , had kept the
secret faithfully from the public whom they were supposed to
represent . Sir Richard reported (July 29, 1867 ) that the new
arrangement had met with the general if not unanimous concur-
rence of the community, with the exception of a few gentlemen
of the clerical profession who felt it their duty to protest. ' As
to the unofficial Members of Council, Sir Richard stated (October
15, 1867 ) that the testimony of every one of them had from the
first been in favour of the measure with the exception of one
28
434 CHAPTER XIX.

acting Member ' (F. Parry) . The principal opponent of the
measure was the Rev. F. S. Turner, of the London Mission , who
wrote some stirring letters to the papers, published a pamphlet
for distribution in England, and induced four other missionaries
(Ch . J. Warren, J. Piper, R. Lechler, J. Loercher) and the
Minister of Union Church (D. B. Morris) to join in the
•
crusade. These objectors, thenceforth known as the moral six,'
presented to the Governor (July 24, 1867) a brief Memorial ,
complaining that the measure had been introduced in an under-
hand and un- English way, and that it was calculated to lead to
a large increase of gambling. The Memorialists further alleged
that the measure was objectionable to a large section of the
Chinese community, and illegal by both British and Chinese law.
They finally averred that the Government had no right to coun-
tenance and sanction vice. The Registrar General (C. C. Smith)
had to do his best, by means of a contemptuous reply he sent
to the missionaries in the Governor's name, to refute their
arguments. He also wrote reports supporting the Governor's
contention that the system had produced good results and gained
the approval of the Chinese community. Sir Richard attributed
at first no importance to the opposition of the missionaries, and
the Duke of Buckingham also declined ( September 26, 1867)
to express any opinion on their Memorial, merely asking the
Governor to report more fully. But the moral six, undismayed
by the apathy of the community and the Secretary of State,
appealed to the home country in a manner which speedily
influenced the British press, re-echoed in Parliament and caused
Sir Richard to complain (January 30, 1868 ) that those clerical
gentlemen had elsewhere gone the length of enforcing their
reasoning by designating him Anti-Christ and accusing him
of wilful untruthfulness. Subsequently, when public opinion in
Hongkong also commenced to turn against his scheme (May 23,
1868 ) , Sir Richard at last combatted the position of the moral
six as that of a lazy and easily satisfied morality which folds its
arms and, while doing nothing to repress acknowledged evils
and nurseries of crime, cries out against the Government
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 435

attempting at least to control the evil which cannot be repressed ,
arguing that the Government is bound rather to ignore the
-existence of the vice than to control what is irrepressible. There
was much truth in this remark.
Meanwhile, however, the protest of the moral six had
aroused public opinion at home, stirred up the Social Science
Association and made itself heard in the only place where
Colonial protests, if basel on a genuine grievance, produce a
tangible effect, viz. in Parliament. As to the action of the
Social Science Association little need be said. That Society
disgraced itself in the matter by becoming the unconscious
too! of the two men who, in Sir J. Bowring's time, had poisoned
the social life of the Colony, viz . the former Attorney General
and the former editor of the Daily Press. These two men,
having learned that the victim of their animosities , the Registrar
General of Sir J. Bowring's time, was the officially recognized
agent and adviser of the licensees in Hongkong, receiving from
them a handsome salary ($20,000 during the first year) , managed
to renew their persecution by assailing Sir Richard's policy under
the aegis of the Social Science Association. At an interview
which Earl Granville granted (March 27 , 1869 ) to a deputation
of that Society, the former Attorney General, who actually
introduced the deputation, and the former editor of the Daily
Press were the principal speakers . They suggested, as if Sir
Richard had not tried this very principle and failed, that the
only way to enforce any laws against gambling houses was by
enforcing the Chinese laws of collective and mutual responsibility
by means of the tithing (Kap) and the hundred (Pao) , insti-
tutions which had been recognized by the Hongkong Legislature
in Ordinances passed between the years 1844 and 1857 , but
never put into execution. However, this interview and the
several Memorials presented by the Secretaries of the Association
(August 1 , 1868, and January 14, 1869 ) , as also Sir Richard's
official reply (October 20 , 1868) which the Secretary of State
declined to forward, as immaterial, had no effect whatever. The
remarks of the Duke of Buckingham on the subject are rather
436 CHAPTER XIX.

instructive as to the importance which the Colonial Office
generally attaches to Memorials . He told Sir Richard (December
8, 1868 ) that, though he might properly defend himself and
his Government from accusations made in Parliament , or which
have been officially made, it was hardly necessary for him to do
so in the case of a private Society.
As to the parliamentary debates on the subject of the
Hongkong gambling houses, they did not contribute any real
help towards a better solution of the important social problem
involved . For a general understanding of Sir Richard's dis-
interested effort to seek a solution of it, even at the risk of the
bitterest obloquy, it was rather helpful that the official documents,
bearing on the whole question , from the time of Sir J. Bowring
down to Sir Richard's latest dispatch, were printed and published
(June 15 , 1868 and August 9 , 1869 ) at the request of Parliament.
The only serious difficulties which Sir Richard encountered
arose out of his relations with the successive Secretaries of State.
Shortly after Sir Richard had opened licensed gaming houses,
the Duke of Buckingham expressed his surprise ( October 14,
1867 ) that reports were reaching him from several quarters to the
effect that the licence fees were being made a source of revenue .
That the Duke had imperfectly understood Sir Richard's policy.
appeared clearly from a statement which he made in the House
of Lords when he said ( December 3, 1867 ) that Sir Richard
did not propose to put gambling houses down but to obtain a
large revenue from them and to extirpate the evil in a very short
time.' Sir Richard had to explain his aims more fully, but when
the Duke, who was about to vacate his office , at last grasped
the real drift of Sir Richard's policy, he used rather strong
language (December 2 , 1868) , expressed his entire disapproval of
"
the proceedings ' and threatened to stop the licensing altogether.'
Sir Richard naturally considered himself unfairly treated and ,
in writing to the Duke's successor (Earl Granville) , referred
(March 6, 1869 ) to the Duke's dispatch as containing sweeping
comments which implied a general censure on the Hongkong
Government.' But this made matters worse. Earl Granville
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 437

now, standing up for his predecessor, censured Sir Richard (May
1 , 1869 ) for the peculiarly unbecoming tone of his remarks . The
embroglio became intensified when Earl Granville complained
(October 7 , 1869) , in view of Sir Richard's independence of
action, that the clearest instructions addressed to him seemed
insufficient to prevent misunderstanding, and actually threatened.
Sir Richard by saying ( October 8, 1869 ) that he would view very
seriously any further attempt to escape from a strict execution
of his instructions. Later on (January 7 , 1870) Earl Granville
again censured Sir Richard for unwarrantably assuming that he
(the Secretary of State) would sanction the proposal to charge
against the Special Fund all expenditure of the Colony on police
and education in excess of a fixed normal standard. The Gover-
nor was sternly ordered to repay into the Special Fund all
unauthorized appropriations, amounting to $129,701 , and was
compelled thereby to sell the Colonial gun-boat and to devise
other forms of retrenchment to the great dismay of the Colony.
The differences between Sir Richard and his superiors in
Downing Street admitted of no compromise and his whole scheme
was wrecked thereby. He had thought only of securing the
co-operation of the Chinese licensees to suppress crime and to
prevent the corruption of the police. They had been thinking
only of their inability to defend in Parliament the raising of any
revenue from vice. What Sir Richard fought for, was the farming
system. What they objected to, was the raising of a revenue.
Let the money be thrown into the sea as soon as it is paid, but
do not let the hold which it gives the Government over the
licensees be abandoned. ' These words , addressed by Sir Richard
to the Duke of Buckingham (January 30, 1868 ) , contain the true
key to an understanding of his policy. But, although in truth
the raising of a revenue and not the use of it was the backbone
of his scheme, yet the mere raising of a revenue from vice was
the exact point in which the Earl of Carnarvon, the Duke of .
Buckingham and Earl Granville saw the real gravamen of the
charges brought against Sir Richard by the opponents of his
scheme. Moreover, having once raised a revenue from the
438 CHAPTER XIX.

gaming houses, Sir Richard did not throw the money into the
sea, nor would he meekly submit, when ordered to segregate it in
the Special Fund, and keep his hands off it. On the contrary,
having deliberately deviated from his instructions by farming.
out the licences, he persistently sought to wring from the Author-
ities in Downing Street admissions which, when read in the
light of his suggestions, which often were left uncontradicted ,
seemed to sanction the application of the gambling revenne
to all sorts of purposes such as served to ameliorate the condition
of the Chinese population. It was this persistent determination.
to have his own way in dealing with the Special Fund, that
irritated his superiors and produced the above mentioned mutual
misunderstanding.
When his relations with the Colonial Office became thus
6
positively strained, Sir Richard's one desire was finality and
positive explicitness of instructions ' (March 7 , 1870 ) . His health
was worn out by the struggle. Accordingly he decided to avail
himself of the sick-leave he had obtained and returned, by way
of Japan and San Francisco, to Europe in order to make, in
personal conference with the Secretary of State, a final effort to
save his measure from failure (April 12, 1870) .
As soon as he had left the Colony, the revulsion of public
feeling which, since 1868, had gradually turned against Sir
Richard's policy , gathered strength for a general condemnation
of it . As early as April 2 , 1868, some of the leading merchants
( Ph. Ryrie, J. B. Taylor, E. A. Hitchcock, R. Rowett , J. Lapraik),
who had originally favoured the Governor's scheme, publicly
stated, at a meeting of the Chamber of Commerce, that the
system was working an incalculable amount of harm , and that
the principal Chinese merchants were of the same opinion.
Nothing further, however, came of this movement . But when
the Governor had departed, the Chief Justice (J. Smale) com-
menced to denounce the Governor's policy from the Bench . He
finally formulated his complaints in communications addressed'
to the Colonial Secretary (August 8, 1870, and February 10,
1871 ) , alleging that the severe enactments passed by Parliament
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 439

since 1843 had never been made law in the Colony ; that within
the years 1867 and 1868 over $ 10,674,740 had been staked and
lost at the Government gaming houses ; that , instead of decreasing
gambling, the Government measure had greatly increased the
vice ; that it caused and fostered very serious crimes and that
suicides had been traced to it ; that a tone of dishonesty had been
engendered by the gaming houses in petty tradesmen and that
this tone had demoralised the police : that as gambling is a crime
in China as well as in England, the actual licensing of it lowers
the prestige of the British Government in China. The Chief
Justice submitted also a draft Bill for the repression of gambling,
but the Attorney General (J. Pauncefote) considered it so severe
that no person in the Colony would be safe from its terrible pains
and penalties . The Lieutenant-Governor ( H. W. Whitfield )
also took sides with the opponents of Sir Richard's measure . He
was anxious to close the gambling houses and frankly told Earl
Kimberley so (August 29 , 1870 ) . He explained that , as their
maintenance failed , in his opinion, to check crime, he saw no
reason why the Colony should have all the odium of a pernicious
system attached to it, whilst it was debarred from the application
of the accruing funds which would be of lasting benefit to public
institutions generally and more especially to those connected
with the Chinese. Inferring from the tenor of the entire cor-
respondence with the Colonial Office, that no more acceptable
action could be taken in the Colony than to put a stop to the
legalisation of public gambling, Major-General Whitfield took
it upon himself, with the approval of the Executive Council, to
give notice (August 17 , 1870 ) to the licensees of his intention to
close the gaming houses on 1st January, 1871. In Hongkong
every one thought the matter settled . But the Earl of Kimberley
telegraphically countermanded this measure and informed the
gallant General that an officer in temporary administration of
the Government should not take upon himself to depart, without
express directions from the Secretary of State, from the policy
of the Governor whose place he occupies. Accordingly, the
licensing system continued for another year, the monopoly being
440 CHAPTER XIX.

sold by auction (January 12 , 1871 ) for $ 15,000 a month . But
this roused the community to make a new effort. Believing
that licensed gambling was affecting the Colony injuriously, that
none of the boasted decrease of crime was attributable to the
licensing system , and that the Police Force was quite competent
to repress gambling so far that it could only be carried on in
secret haunts, but ignoring the corruption of the police arising
from such action, the Chamber of Commerce sent in a Memorial
to the Secretary of State (January 10, 1871 ) praying that the
licensing system be discontinued. In addition to this official
document, signed by the Chairman (Ph. Ryrie) , Vice-Chairman
(A. Limeneen) and Secretary ( N. Blakeman) and endorsed by
40 Members, Dr. Legge and Mr. David Welsh presented a further
Memorial, bearing 316 signatures and representing every class of
society, to express the community's protest against Sir Richard's
scheme. Even the Chinese community, well knowing that the
Registrar General (C. C. Smith) was the strongest supporter
and defender of the system, presented him with a Memorial
strongly condemning it. These popular demonstrations were
immediately followed up by the Chief Justice with a judicial
declaration (February , 1871 ) to the effect that, in the absence
of a special Ordinance, the licensing of gaming houses in the
Colony was illegal. More effectual was a renewal of the agitation
in England, when the House of Commons, at the motion of
Mr. Bowring, asked ( March 31 , 1871 ) for the production of
further documents on the gambling house licensing system.
which were accordingly published ( July 24 , 1871 ) . To all the
Memorials of the people of Hongkong the Earl of Kimberley re-
turned the laconic reply that , on the return of Sir R. MacDonnell
to the Colony, instructions would be given him to consider the
whole matter with a view to the termination of the system of
licensing gaming houses. Sir Richard's fight was over. The
battle was lost. But, though the system was abandoned im-
mediately after the Governor's return (December 8 , 1871 ) , no
positive gain resulted from the abolition of the gaming houses .
Gambling and police corruption continued thenceforth unchecked .
 THE ADMINISTRATION OF SIR R. G. MACDONNELL. 441

The Government thereafter simply ignored the problem which
is still waiting for a master hand to solve it.
Allusion has already been made to another, exclusively
financial, question which also troubled Sir Richard's adminis-
tration as a legacy of the past, viz. the Mint established by his
predecessor, Sir H. Robinson. When the Mint was first opened
(April 7 , 1866 ) , it had already cost $400,000, and an additional
annual expenditure of $70,000 was required for its maintenance,
at a time when the Colony was virtually insolvent. An unusually
low rate of exchange told at once unfavourably against the
Mint's prospects. The Chinese were prejudiced against the new
dollar by the false rumour that chopping the Queen's coin would
involve liability to criminal procedure. Hence the local demand
for minting operations was so small that it appeared to the
Governor to be incommensurate with the working expenditure
of the establishment. The Mint actually earned from May,
1866, to February, 1868, only about $20,000 in seignorage.
Sir Richard, foreseeing this unsatisfactory result and pressed by
financial difficulties, appointed a Commission (October, 1866 )
to inquire into the working of the Mint. The report presented
by the Commissioners (January 1 , 1867 ) was greatly discour-
aging, as they merely recommended to keep the Mint open
for twelve months longer on the ground that the arrangements
made with the Mint staff, regarding compensation in the event