Keeshen hastened to notify Elliot that he stood ready to hand over Hong Kong and the $6,000,000 indemnity. But even the shock of defeat had not flushed the Emperor from his dream world of superiority; he repudiated Keeshen’s agreement and ordered him to rally the troops for “an awful display of Celestial vengeance.” Well aware of the hopelessness of his situation, Keeshen tried to hold out by postponing his meetings with Elliot. Elliot, not to be put off this time, countered by opening a general assault along the Canton River. Within a month, his combined land and sea offensive had reduced every fort on the water route to Canton and his ships rode at anchor in front of the city.
British preparations to storm the city were well advanced when a fresh truce was arranged. The entire British force sailed back to Hong Kong, having retreated from almost certain victory. Elliot, however, felt no disappointment; he had never wanted to use more force than necessary to restore stable trade conditions. He feared that full-scale war would bring down the Chinese government, plunging the country into revolution and chaos.
Hong Kong had become _de facto_ British territory on January 26, 1841, when the Union Jack was raised at Possession Point and the island claimed for Queen Victoria. Its 4,500 inhabitants, who had never heard of the Queen, became her unprotesting subjects.
The acquisition of the island produced ignominy enough for both sides; Keeshen was exiled to Tartary for giving it up and Elliot was dismissed by Palmerston for accepting “a barren island with hardly a house upon it,” instead of obeying the Foreign Secretary’s orders and driving a much harder bargain.
A succession of disasters swept over the colony in its first year of existence. “Hong Kong Fever,” a form of malaria thought to have been caused by digging up the earth for new roads and buildings, killed hundreds of settlers. Two violent typhoons unroofed practically every temporary building on the rocky slopes and drowned a tenth of the boat population. The wreckage of the ships and buildings had scarcely been cleared away when a fire broke out among the flimsy, closely packed mat sheds. In a few hours, it burned down most of the Chinese huts on the island.