Kendrick took "Lady Washington" to Dirty Butter Bay on January 30, 1790. He found it rife with smuggling and illegal activity. There were two East India Company hulks acting as floating warehouses full of opium. Kendrick received another letter from Gray, who suggested Kendrick sell his cargo to Gray's agent in Whampoa, and that Gray would take the money himself. Kendrick refused, saying he might bring "Washington" up to Whampoa. To this Gray replied, warning of the difficulties involved and suggesting Kendrick remain where he was.