One more question remains to be ventilated, viz., whether England is able to secure absolute power in the North Pacific with the naval and military forces she has at her command there, using Hong Kong as the centre of war preparations. I answer in the negative. It could be maintained only by an occupier of the Island of Formosa, the “Malta” of the North Pacific, which lies between the North China Sea and the South China Sea. Its area is estimated at 14,978 square miles. It has a healthy climate, tempered by the influence of the sea and its mountains. Coal is to be found in considerable quantities, although not of the best quality. Its natural products are plentiful, such as sugar, tea, and rice. It possesses several good harbours, one of which, Tam-sui, or Howei, is surrounded by hills upwards of 2,000 feet high, and has a depth of 3½ fathoms with a bar of 7½ feet. From this island, with a good navy, any power almost might be exerted over the North and South China Seas, and over the Pacific highways from Hong Kong to Australia, Panama, Nicaragua, San Francisco, Vancouver, Japan, Shanghai. All these are in fairly close proximity to Formosa, and the Shanghai route to Hong Kong actually runs between the island and the China mainland. There remain still two or three more facts which must not be neglected in order to obtain a fair view of this important question. (_a_) It is a fine post for any offensive attack upon China, and also a stronghold for an attack upon the British power in the Pacific. If fortified and defended by a navy from any other power, Formosa would prove a great rival to Hong Kong, which would lose at least half of its importance, commercially and strategically, and which has already been somewhat weakened by the French occupation of Cochin China, in 1882.[23] (_b_) In case of Asiatic complications, England would naturally expect reinforcements from Australia, and from the mother country by the Canadian Pacific Railway, but after they arrive at Vancouver, and are on transport, they will be at the mercy either of Japan or the occupier, whoever it may be, of Formosa. Even the Bismarckian policy _re_ New Guinea would be broken down, _i.e._, all commercial and strategical communication between Hong Kong and Australia would be seriously incommoded by the occupation of Formosa. (_c_) If China herself occupied Formosa thoroughly,[24] and allied with Japan who occupies the Loo Choo Islands, they would be impregnable in the sea above 20° of N. lat. Again, if the occupier of the Loo Choo Islands[25] also occupied Formosa on a military basis, she again would have nearly absolute control of the North Pacific. England would be supreme if she held both Hong Kong and Formosa; Germany if the holder would not only complete the Bismarckian policy in New Guinea, but would start a new Germanic policy in the North Pacific.