In May 1863 Lay returned to Shanghai, and, Robert Hart's acting appointment having come to an end, he was made Commissioner at Shanghai, with charge of the Yangtsze ports, the position being specially created for him by Prince Kung in order to give him more authority than would belong to the simple Commissioner of a port.

Tsz-fuh King-pih went and informed Tsz-kung of this remark.

'The convention,' he wrote, 'which you concluded with the Prince of Kung on the 24th of October is entirely satisfactory to Her Majesty's Government.

The first order transmitted by Prince Kung to the new Inspector-Generalor the I.G., as he was always familiarly calledwas that he should live at Shanghai.