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foreign ships declined to the extent of 5.28 per cent., the greatest decline being on the part of vessels under Continental flags. Money was scarce in the Colony and quotations for most stocks continued to fall, though known to offer good investment for capital. Sterling exchange declined until the dollar touched 3s. 6⅛d. and the tael fell below 5 shillings. Never, it was said, was trade less profitable in Hongkong. However, with the year 1880, a general improvement set in. Trade now shewed a disposition to be more brisk and remunerative, than it had been for years before. Speculation was kept within reasonable limits, time bargains, owing to the bitter lessons of 1878, were now regarded as dangerously hazardous ventures, and stocks accordingly kept on a sounder footing. The H.C. & M. Steamboat Company received a new lease of life by a friendly arrangement with the opposition line of Messrs. Butterfield and Swire. In the year 1880 the sugar refining industry of Hongkong commenced to be a great source of wealth to Hongkong, and the East Point Company solidified for the time all the local sugar interests by purchasing the concerns of dangerous competitors. Nevertheless there was room for yet another large sugar factory, and next year (July 6, 1881) ground was purchased at Quarry Bay by Mr. E. Mackintosh for Messrs. Butterfield and Swire, who immediately commenced the erection of new and extensive sugar works. The Hongkong and Shanghai Bank attained in 1880 to a commanding position in the China Trade, being content to mind its own legitimate business. Year after year, throughout this period, the Bank made a substantial addition to its reserve fund, it being the intention of the Directors to raise the reserve fund to a level with half the amount of the paid up capital. Most noticeable was, by the end of the year 1881, the growing favour in which the Bank was held by investors. Its shares continued to rise and stood at 116 per cent. premium at the beginning of 1882. The announcement in the London Gazette (November 14, 1881) of the charter of incorporation of the British North Borneo Company, was hailed in Hongkong with great satisfaction. It was generally considered that the