In the island of Lampacao, off the south‐eastern coast, their traders were settled, pushing their commerce with the mainland. In 1557 the neighbouring peninsula of Macao was ceded to them in token of the Chinese Emperor’s gratitude for their aid in destroying the power of a pirate chief who had long held sway in the seas around. The Dutch, the envious rivals of the Portuguese in the East, turned covetous eyes on the little colony which speedily began to flourish. In 1622 the troops in Macao were despatched to assist the Chinese against the Tartars. Taking advantage of their absence, the Governor of the Dutch East Indies fitted out a fleet to capture their city. In the June of that year the hostile ships appeared off Macao and landed a force to storm the fort. The valiant citizens fell upon and defeated the invaders; and the Dutch sailed away baffled. Until the early part of the nineteenth century the Portuguese paid an annual tribute of five hundred taels to the Chinese Government in acknowledgment of their nominal suzerainty. In 1848, the then Governor, Ferreira Amaral, refused to continue this payment and expelled the Chinese officials from the colony. In 1887, the independence of Macao was formally admitted by the Emperor in a treaty to that effect. But the palmy days of its commerce died with the birth of Hong Kong. The importance of the Portuguese settlement has dwindled away. Macao is but a relic of the past. Its harbour is empty. The sea around has silted up with the detritus from the Pearl River until now no large vessels can approach. A small trade in tea, tobacco, opium, and silk is all that is left. The chief revenue is derived from the taxes levied on the numerous Chinese gambling‐houses in the city, which have gained for it the title of the Monte Carlo of the East. Macao is situated on a small peninsula connected by a long, narrow causeway with the island of Heung Shan. The town faces southward and, sheltered by another island from the boisterous gales of the China seas, is yet cooled by the refreshing breezes of the south, from which quarter the wind blows most of the year in that latitude. Victoria in our colony, on the other hand, is cut off from them by the high Peak towering above it; and its climate in consequence is hot and steamy in the long and unpleasant summer. So Macao is, then, a favourite resort of the citizens of Hong Kong. The large, flat‐bottomed steamer that runs between the two places is generally crowded on Saturdays with inhabitants of the British colony, going to spend the week‐end on the cooler rival island.