British rule and protection without forfeiting their privileges as natives of China. Canton native merchants now took to visiting the auction rooms of Hongkong and began, for fear of pirates, to charter small European sailing vessels (mostly German or Danish) for the carrying on of their own coasting trade With the Treaty ports on the east coast. Fleets of Chinese trading junks also occasionally engaged small English steamers to convoy them as a protection against pirates. Thus the reviving native trade reacted as a fillip upon the stagnating European commerce of the Colony.
Communication with Canton was at this period a source of much trouble to British merchants. Endeavours which had been made, by Mr. Donald Matheson in 1845 and by Mr. A. Campbell in 1847, to persuade the directors of the Peninsular and Oriental Steam Navigation Company to connect their monthly mail steamers to Hongkong by a branch line with Canton, failed to have any effect till the close of the year 1848, when it was too late. Meanwhile some sixty merchants had made an arrangement with the owners of the S.S. Corsair to carry their mails to Canton for a monthly subsidy of £150. In 1847 the Postmaster insisted on the steamer's carrying 'and delivering' Post Office letters for Canton at twopence each. When the captain of the Corsair refused to deliver the letters to the addressees on the ground that there was no Post Office in Canton, Sir J. Davis ordered legal proceedings to be instituted, which resulted (February 23, 1847) in the infliction of a fine of £100. Although the verdict (based on an Imperial Act) was accompanied by a recommendation that the fine be remitted, the Governor declined to exercise his prerogative in the case. The British community, feeling themselves once more sorely aggrieved, addressed their complaints to the Postmaster General in London, and resolved to help themselves by establishing a Hongkong and Canton Steamboat Company as a joint-stock enterprise.
Sir J. Davis boldly attempted to reform the currency of the Colony without consulting the mercantile community. Sir H. Pottinger had, as mentioned above, fixed the value of the East
