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The Chinese government reacted with moral lectures ("It is wrong to make a profit out of what is harmful to others") and threatened to ban the sale of rhubarb to Europeans, relying on the firmly held Chinese belief that all foreigners, and especially the English, would die of constipation if deprived of rhubarb's laxative qualities.
These measures failing, the imperial government seized and burned the British opium stocks at Canton. In the Opium War that followed, the primitive Chinese navy was blown to pieces and its feudal armies scattered. Under the peace treaty, the humiliated Emperor had to permit free trade at five Chinese ports, pay an indemnity of $21 million, and give to the British "a large and properly situated island" off the coast, "from which Her Majesty's subjects in China may be alike protected and controlled."
Amusing Choice. The island selected by the British plenipotentiary, Sir Henry Pottinger, was Hong Kong (Fragrant Harbor). It was so barren and lacking in water that even the Chinese considered it uninhabitable. Pottinger's choice aroused derision in London, where "Go to Hong Kong" became a euphemistic form of cussing among fashionable ladies. And Queen Victoria wrote a friend: "Albert is so much amused at my having got the island of Hong Kong."
Hong Kong's warehouses were soon piled high with opium, and some 80 clipper ships smuggled the drug to Chinese dealers along the 4,000-mile coast of the mainland. Reckless men poured in from every land. When the potent Hongkong & Shanghai Banking Corp. was founded in 1864, it was backed by 14 different firms—British, American, German, Indian, Turkish, Danish—and its first manager was a Frenchman. A British visitor warned that "anyone compelled to come by duty to Hong Kong should have a stout heart and a lively trust in the mercy of God."
Though opium was not officially outlawed in Hong Kong until 1945, the merchant taipans gradually shifted to less questionable ways of making money. Creating nothing itself, Hong Kong became a vast free port and shipping point. The colony expanded to the Kowloon Peninsula in 1860 and took the New Territories on a 99-year lease from China in 1898. Every disorder on the mainland increased the power and population of Hong Kong. By the turn of the century, 230,000 Chinese were residents; in the 1930s, the chaos caused by Japan's invasion of China brought in a million refugees. On Dec. 8, 1941, the Japanese dive-bombed Kai Tak Airport. Hong Kong's garrison surrendered to the Japanese on Christmas Day, 1941—exactly 100 years after the British had founded the colony.
Master Stroke. At war's end. Hong Kong was a wreck. Its harbor facilities had been destroyed by bombings, and two-thirds of its population had fled. The colony was flooded with worthless currency called "duress notes," which the Japanese had forced the Hongkong & Shanghai Banking Corp. to issue. The British acted boldly: with the help of the local government and the Bank of England, the corporation redeemed every duress note at face value—an operation costing $30 million. "A master stroke," sighed one relieved financier. "Nothing did more to restore Hong Kong's prestige so quickly."