Dropping by Van Diemen's Land to resupply, Allegiance discovered William Bligh, late of HMS Bounty, exiled there after being deposed in a military coup, and have since borne him to Sydney.

Macarthur sends Laurence on an expedition to find a pass from Sydney through the Blue Mountains, which the aviators readily undertake to stay out of the political fray; they are granted a crew of convicts to provide manual labor.

Tharkay asks to join them, eventually revealing that he has been tasked with tracking down a smuggling ring that operates out of China — and not out of Canton, the sole Chinese port open to foreigners.

These sacs are enormous enough to allow him to float, and Dorset, the dragon surgeon, announces that only dragonets destined to become the heaviest of heavy-weights ever exhibit negative total body weight in this way.

There they find the source of Tharkay's smuggling ring: a port, operated jointly by the Larrakia people and the Chinese themselves, using trained sea serpents to ferry cargo from China.

Iskierka is ordered to Brazil to counter Napoleon's latest plans there, whilst Macarthur attempts to entice Laurence into taking a position with the nascent Australian government.