time, even in summer, the settlement is as little unhealthy as a place within the tropics, resting on a steaming sea under the lee of a mountain, can be. In winter it is, as it always has been, cold and bracing; and at Christmas time our exiled countrymen draw round the fire, talk of old times and schools, recollect their Horace enough to say

'Dissolve frigus, ligna super foco
Large reponens;

and drink cheering glasses of hot toddy as a substitute for the four-year-old wine from a Sabine jar. More recently the approaches to its harbour have been strongly fortified, and the annexation of a tract of territory on the mainland opposite has rendered it secure against the casual attack of any enemy. The inhabitants are, of course, mainly Chinese. According to Mr. Colquhoun, of the total population of 240,000, only some 8,000, exclusive of the garrison, are 'whites, and of these at least half are euphemistically termed 'Portuguese.' But if euphemistically Portuguese, then also euphemistically white; non-euphemistically, they are 'snuff and butter.'

'The British have acted with great liberality towards their Oriental settlers, protecting the colony, and asking only indirect advantage, giving them educational and other opportunities practically equal to those obtainable in self-governing colonies. Order is maintained without overstepping the limits of police work, and a liberal commercial policy is pursued. This system is not the result of a cutand-dried code, but was gradually evolved out of experience as the conditions arose, and that is the secret of Britain's colonial success in every clime. . . . In every case success, however partial, has been the result of the system indicated-that of seeking no direct revenue for the mother country, building up step by step, and modifying the structure to the needs of the particular situation.'

Mr. Colquhoun, however, rightly adds that much of Great Britain's success has been due to the fact that she has had exceptional opportunities for picking and choosing the best places, and has, on the whole, exercised good judgement in choosing. In itself, no place could well have presented a more unpromising appearance than, for instance, HongKong before its annexation. Early in the thirties the East India Company's ships had found it out, and sometimes waited there; and on the knowledge thus obtained was formed the appreciation of its suitability for being, as it has become, the depôt and centre of Occidental trade. The strategic value of the harbour has been merely a corollary to its commercial, though Mr. Colquhoun considers that

recent events in the far East have enhanced the strategic value and depreciated the commercial, by turning China 'from a friendly, commercial, comparatively powerful and ' independent state into an arena for foreign rivalries.' On this there is, perhaps, a good deal more to be said than Mr. Colquhoun has ventured on; but a further suggestion of commercial depreciation has a more direct significance.

The presence of America in the Philippines, and the consequent shifting of the centre of activity considerably to the east of Hong-Kong, open-he believes-a grave possibility; for it is obvious that this island on the Chinese coast will, in the future, be out of the direct trade routes between Australasia, the Malay Archipelago, and the great markets of America. Its value as a distributing centre for Northern China will be greatly impaired by the vast changes occurring in that quarter. In fact, the developements in the Pacific will, speaking broadly, leave Hong-Kong largely out of the reckoning, except as regards the trade with Southern China. The future of the colony depends, therefore, on the maintenance of the integrity of China, and it seems extraordinary that there has been no powerful expression of feeling emanating from the local merchants to induce the Government to take strenuous steps to protect their interests on the mainland of Asia.

It may be conceded that the interests of English trade in China call for a fuller and more careful consideration by the Government than, during these last few years, they seem to have had; but it is difficult to admit that the prosperity of Hong-Kong-simply as Hong-Kong-is of such importance to the Empire as to give it the right to dictate the policy of any government; and the demand that it should do so has some grotesque resemblance to a conjectural desire of the tail to wag the dog. But the continuation of Mr. Colquhoun's remarks on the impending depreciation of Hong-Kong is noteworthy :

'The possibility of Manila becoming a serious rival is one that does not at present seriously exercise the Hong-Kong merchant or shipowner. But although that place is handicapped during certain seasons by adverse winds and typhoons, there are evident signs that the United States mean to make an important centre of the capital of the Philippines. At present Manila Bay, though nearly landlocked, is not a good natural harbour, but large sums are to be spent on improving it, a measure that cannot be merely for ornamental purposes.'

Singapore rests on a basis somewhat different from that of Hong-Kong, and will not be affected to the same extent

by this presumed easterly movement of the centre of commercial activity, though it cannot be made without Singapore sensibly feeling it; for such movement will mean that the bulk of the trade to or from China is passing by the Pacific and the American isthmus, instead of, as now, by the African isthmus or the Cape of Good Hope. Such a change is possible, but, in view of the enormously increased distances, we do not think it probable; though, so far as the trade from the United States by San Francisco is concerned, or from Canada by Victoria, Manila will pretty certainly, and at no distant date, be again a principal commercial centre; unless, indeed, Nagasaki or some newly born port in Formosa should prove more tempting. For European trade and for the heavier trade from Eastern America-States or Canada-we greatly doubt whether the commercial centre is on the point of shifting in the way Mr. Colquhoun supposes, even if-under American rule Manila is made a free port, which would be contrary to all that we know of American fiscal principles.

In neither case, however, do we see that our position would be bettered by moving the centre of English trade from Hong-Kong to Sandakan in the north of Borneo, as Mr. Colquhoun suggests. Sandakan is unquestionably a 'magnificent' harbour. It is so styled in the Admiralty 'Sailing Directions,' a work not given to poetry or to exaggeration of expression. And magnificent as it is now, it is capable of almost unlimited extension as the developement of Borneo is extended. But neither by its position, its bearings and distances from the Chinese ports, its weather, its monsoons, nor its neighbourhood to the dangerous navigation of the Sulu Sea and to the fever-laden jungle of Borneo, does it seem to us in any way calculated to take the place of Hong-Kong, after fifty years of improvement. As a natural harbour Hong-Kong is the better, and though not so large, is quite large enough. Notwithstanding all the changes, imminent or possible, its position seems to us better, much better, than that of Sandakan; and it will take many times fifty years to clear the Borneo jungle, to drain the Borneo swamps, and to bring the country to even the comparative salubrity of Hong-Kong. Interesting as these speculations are, they fade into insignificance before the clear statement that foreign shipping companies, mostly German, have absorbed the greater part, if not the whole, of the local traffic of the far East and especially at Singapore. The change has, indeed, been taking place for

the last three years, and is now an accomplished fact. Mr. Colquhoun's

'attention was forcibly drawn to this by the discovery, when he desired to go from the Straits to North Borneo-from one British possession to another that he was actually forced to travel by a German steamer, a branch of the North German Lloyd. The same line is now the chief one running between Singapore and Manila, and between North Borneo and the Philippines. The same flag now covers the carrying trade between Singapore and Bangkok. Until the other day these were all British lines.'

Mr. Colquhoun takes this as his text to make several severe charges against the Peninsular and Oriental Steam Navigation Company, whom he accuses of a short-sighted greed which he considers mainly, if not wholly, responsible for this result. He says:

'For some time past dwellers in the East have found much to complain of in the service of British steamers, notably the P. and O. Company, which had practically a monopoly; and when Germany started a magnificent passenger line, on which the comforts of passengers were carefully consulted, many people preferred to travel by it rather than face the high prices, limited accommodation, and in many cases the scant courtesy they had hitherto put up with on their own boats. The policy of the German line was to please the passengers, and they succeeded. On more than one occasion an outcry was raised when a high official and his family chose to travel by a foreign line, but such an event no longer attracts attention. The claims of patriotism were urged, but British subjects objected to travelling on uncomfortable steamers which, though heavily subsidised, persisted in employing Lascar crews. Germany has not been the only competitor for both goods and passenger traffic. The French Messageries Maritimes was first in the field, but has made little progress. But the excellent and inexpensive boats of the Nippon Yusen Kaisha have absorbed a great deal of both the freight and passenger traffic between East and West, and their fleet is yearly increased. It is to be regretted that this competition, which should have been healthy and stimulating in its effect, has not led Great Britain to make further efforts in this direction. Apart from the open ports, British prosperity has mainly been due to competition and cheapness of distribution, and the falling-off described is largely attributable to a deviation from this traditional policy and to the short-sighted and unpatriotic views of British shipowners aiming at present profits rather than permanent prosperity.'

We have given this quotation at length because it puts the case as it is often heard from men partially informed, but ignorant of the details. Practised traveller as Mr. Colquhoun is, he appears to be exceptionally ignorant as to the actual facts; and as to matters of opinion, writes with

an air of positive certainty on points which proved so difficult that a committee of the House of Commons, after examining them for three months of last summer, hearing and collecting the evidence of many experts, could only give in an interim report,* recommending that, as they had not been able to conclude the investigation, they should be reappointed early in the next (the present) session.

What the committee could not decide in an investigation lasting over three months, Mr. Colquhoun pronounces on off hand, with the almost necessary consequence that several of his statements and all of his inferences and implications are distinctly contradicted by the evidence before the committee. To examine the several issues at length would require much more space than is at our disposal, and it is unnecessary to do so, for the full evidence can be read in the blue-book to which we have referred, and, later on, in its sequel, which will report the conclusion of the investigation now proceeding. It is therefore enough to say, in brief, that expert opinion seems decidedly in favour of the employment of Lascars, both as a sanitary and economical measure; that the statement that the P. and O. is highly subsidised is incorrect, the so-called subsidy being merely the payment-and, in the opinion of the P. and O. Company, a very meagre payment for services actually rendered; and that the implication that, of all the companies referred to, the P. and O. is the only one subsidised, is absolutely untrue. It is indeed monstrous, for, quite independent of the evidence now before us, it has been matter of common repute that the North German Lloyd, the Messageries Maritimes, and the Nippon Yusen Kaisha receive very large subsidies from their respective governments; and that as true subsidies, not as payments for service.

Whether such subsidies are or are not to the ultimate advantage of the country that pays them is the question which, as at present reported, the parliamentary committee has not been able to answer; and, indeed, it may be doubted whether it admits of a categorical answer. But there can, we take it, be no doubt that they are, at the time of payment, greatly to the advantage of the companies receiving them, and render it possible for them to run steamers on lines which do not, of themselves, bring in sufficient profit. And

* Parliamentary Papers: Report, Steamship Subsidies. Ordered to be printed, August 1, 1901.