Negotiations continued at the Bogue, but the Chinese, in spite of the truce, were observed to be increasing their defences, and notice was accordingly given to them to desist. The communications were frequent, and, on the 17th, just a week after the commencement of the truce, Captain Elliot went down in the Nemesis to Macao. There seemed, however, to prevail an impression that the affair was so far from being settled, that another collision could scarcely be avoided, and therefore no measure of precaution was omitted on our side. On the 20th of January, a circular was issued by Captain Elliot, dated at Macao, announcing that _preliminary_ arrangements had been concluded, but reserving the details for future negotiation. Hong-Kong was to be ceded to us; an indemnity of six million dollars was to be paid by the Chinese in six equal annual instalments, one million being paid down at once, and the last in 1846; direct official intercourse was to be maintained upon terms of perfect equality, and trade was to be resumed within the port of Canton, within ten days. But it would also appear that an intimation had been made of an intention to remove the greater portion of the trade to Hong-Kong, for it was provided that it should only continue "to be carried on at Whampoa until further arrangements were practicable at the new settlement." Nothing could at first appear more satisfactory than this arrangement; but, as will presently be seen, it gave ample time to the Chinese to make further preparations for defence, and abundant loopholes for the exercise of their crafty ingenuity. At the same time, Captain Elliot urged upon the consideration of his countrymen "the necessity of adopting a conciliatory treatment towards the people, and a becoming deference for the country upon the threshold of which we were about to be established." Nothing further need here be said upon this subject, except that on the following day, the 21st January, the Nemesis was sent to convey two mandarins to Chuenpee, who were to receive back the forts from Captain Scott, of the Samarang, who had been appointed _pro tempore_ governor of this fortress. The British colours were hauled down, and the Chinese dragon was hoisted in their place, under a salute from the flag-ship; it was very evident that no salute had ever sounded so welcome to Chinese ears before. As soon as a few guns could be got ready for the purpose, the salute was returned by the Chinese. We had certainly shewn rather a chivalrous leniency to their government, in thus so suddenly restoring to them one of their principal strongholds. Indeed, everything looked extremely peaceable upon paper, and the Chinese contrived to create a temporary belief in the sincerity of their intentions.[22]