CHAPTER IX

PRESENT CONDITION OF NORTH BORNEO—LOVELY COUNTRY—GOOD HARBOURS ON WEST COAST—FORMATION OF NORTH BORNEO COMPANY—PRINCIPAL SETTLEMENTS—TELEGRAPHIC LINES—THE RAILWAY FROM PADAS—POPULATION—TOBACCO CULTIVATION—GOLD—THE PUBLIC SERVICE—THE POLICE OF NORTH BORNEO—METHODS OF RAISING REVENUE—RECEIPTS AND EXPENDITURE—TRADE RETURNS—EXPORTS—INTERFERENCE WITH TRADERS—A GREAT FUTURE FOR NORTH BORNEO

To complete the survey of those countries, which, through the policy of Rajah Brooke, were ultimately brought under the influence and protection of England, I must devote a chapter to the British North Borneo Company.

There is nothing grander or more lovely than the country which lies between our colony of Labuan and Marudu Bay, on the extreme north of the great island. I have sailed many times along that beautiful coast, and have been lost in admiration at the variety of its scenery, from the soft outline of its well-wooded shores to the succession of ranges of undulating hills which form the background, until all are dwarfed by the magnificent mountain of Kina Balu, which towers above them.

In our journeys towards this lofty mountain, Sir Hugh Low and I passed through a great variety of country. Our first expedition took us from Abai Bay across a cultivated plain to the interior of the Tampasuk river, the low land extending for many miles on either side of the path we followed, and stretching for an indefinite distance ahead of us. Here the natives ride the water buffaloes, the oxen, the bulls and cows as they do horses in other countries. We took up our quarters for the night in the substantial house of a Bajau chief, an old friend of my fellow traveller, and next day we started inland, riding for many hours over a slightly undulating plain, which continued to the foot of the ranges of hills in front. We occasionally passed pretty villages, shaded by dense clumps of cocoanut palms and mango trees. The scene was magnificent. When we reached the first low range the path became stony and very rough, so that we had to give up our horses and trust to our own feet, and most enjoyable days they were, as we advanced along the banks of the Tampasuk, through fertile fields in full cultivation, the only inconvenience our having so constantly to ford the river. At length we turned from the stream, climbing a steepish hill to the extensive village of Kiau, which is built on a sloping buttress of Kina Balu, about three thousand feet above the level of the sea.

On our next visit to the mountain we started from Gaya Bay, then across the lake-like Mengkabong river, and after riding over a well-cultivated plain we climbed to the summit of the first range of hills, and then followed the ridges towards the mountain. Nothing could have been finer than the scenery. There was no forest, of which in Borneo one sometimes gets tired; all the land was either under cultivation or had been cultivated, ideal spots for coffee plantations if the soil be suitable. We continued on the high land until we reached the Tampasuk river, when we followed the same path as we had taken on our previous journey. The weeks we spent on the great mountain were weeks of pleasure, and we explored many of its buttresses, and at length climbed again to its summit. Mr Alfred Wallace used to say that it was worth the journey to Borneo in order to eat the fresh fruit of the Durian, but I think the fatigues of the long voyage would be amply repaid by a visit to this lovely coast and an excursion to its great mountain.

On one occasion we pitched our tents for a time on the western slope of Kina Balu, about five thousand feet above the sea, on a spot which was fairly level for half a mile in length by a quarter in breadth. There were but few trees, the ground being rocky, but the stony surface was covered by beautiful nepenthes plants, with purple pitchers, which held as much as two quarts of water. From this elevation we could see over the ranges of hills we had passed in our journeys, the reaches of many rivers, the Tampasuk plain to the China Sea beyond. It would be a perfect site for a sanatorium. Roads would have to be made, then invalids and others would come to enjoy the healthy breezes, and gain strength to make excursions over the mountain. Forty years ago I recommended the Government of India to send the least guilty of their mutineers to the north-west coast, where they would have opened up a splendid country, and our camping ground would have furnished space for the barracks required for a garrison of English troops.

In these days when mountaineers are seeking new worlds to conquer, it may interest them to read the following short description of our first joint expedition to Kina Balu. To ascend this splendid peak has, no doubt, been the desire of all those who have looked upon its noble proportions. Seen from the north-west, no grander effect can be conceived, as it rises sheer out of the plain and sweeps aloft until it attains the towering height of nearly fourteen thousand feet. Its grand precipices, its polished granite surfaces, glittering under the bright tropical rays, the dashing cascades which fall from a height so great that they dissolve in spray before they are lost in the dark valleys below, have a magical effect on the imagination, and I felt a longing, scarcely to be conceived, to explore its unknown beauties. No amount of fatigue, no suffering, no opposition could stop us when once we started from the coast, and the first time I reached the summit, it was with bare feet that left a red tinge on the rocks at every step. But all this was unnoticed as I viewed the grandeur of the scene around, the lofty peaks of every varied form, the magnificent slopes of apparently polished granite, the broad terraces, the cyclopean walls fringing the giddy precipices, the chasms, whose depths the eye could not penetrate. There was nothing that stopped our onward march, and no rest was sought until we reached the solitary southern peak and I had climbed to its very pinnacle, and rested on a spot not a yard in breadth. Then, and only then, did the glow of triumph mantle in my cheeks as my eyes rested with satisfaction on the vast panorama spread out below. Unfortunately misty clouds swept round the mountain obscuring the splendour of the scene, but they lent a powerful aid to the imagination, as through the rents in the fleecy curtain, rivers, mountains and villages were now visible, now hidden. And there, looking south, in the distance high above all, with nothing but the thin air between, rose another peak, so lofty that it was impossible to estimate its distance. In that rarefied air remote objects appear near, and the voice can be heard without an effort through a space which in the plains below it could not penetrate.

I had never before attained so great a height, and never before had I seen such flowers so brilliant and so numerous. There were rhododendrons of the brightest scarlet, or blood colour, or rosy pink, in bunches of forty blossoms, covering trees twenty feet in height. And not single trees, but masses of rhododendrons in sheltered nooks, literally bending beneath the weight of their flowers. And how marvellous were the shapes of the nepenthes, how beautiful in colour, how delicate in form!

Fourteen thousand feet does not appear very lofty for a mountain, but from the north-west you see the whole gigantic form without the intervention of other summits. In Bolivia I have looked at heights rising to over twenty-five thousand feet, but you observe them from plains twelve thousand feet above the sea; in Mexico, the highest volcano reaches to about nineteen thousand feet, but then it is usually seen from the capital, itself at seven thousand five hundred feet; and the same with the highest European mountains.

Sir Hugh Low and I were for many years the only real explorers of these mountains, and I feel a sort of paternal interest in the British North Borneo Company, as Sir Alfred Dent once informed me that it was my work, Life in the Forests of the Far East, which first suggested the idea of acquiring the north-west coast for a governing and developing company.

The north-west coast possesses two very important harbours. Gaya Bay has often been recommended as a naval station to command the China Seas. It certainly offers every facility, and would be a port of refuge in war time for our mercantile marine. In many respects, however, the Port of Labuan is more suitable for all purposes, as it not only has an excellent anchorage easily defended, but it is well supplied with coal from mines on the island itself, and is opposite the terminus of the trans-Bornean railway, now in course of construction, which would bring down full supplies of cattle and provisions from the fertile districts of Padas and Kalias. It has also the advantage of having the whole of Brunei Bay enclosed by territory under English protection, with the Sarawak Government coal mines at Muara, and the productive rivers of Limbang and Trusan to add to its supplies.

Labuan is administered, with the sanction of our Government, by the British North Borneo Company, and is likely to be one of the most flourishing of its possessions, as it is not only connected by telegraph lines with Singapore and Hong Kong, a through British line, but it must increase in consequence in these days of wars and rumours of wars.

Sir Alfred Dent acquired through an agent the concession of the north-west coast of Borneo from the Sultan of Brunei, though with some important exceptions, now in process of being handed over to the Company, as well as the north-east coast, which during the last century had been ceded to England by a Sultan of Sulu, but which we had left unoccupied; all necessary arrangements were made with the government of those islands. These concessions were first worked by a Provisional Association, and were, in 1881, taken over by the newly-formed North Borneo Company on very onerous terms, which, at the present day, it would be useless to criticise, but which left the directors with insufficient working capital to push development with any vigour.

It is not necessary to trace in any detail the history of the Company during the last seventeen years. My object being rather to give a general view of its present condition. I may remark, however, to account for its still backward state, that its progress was much impeded by a want of knowledge, on the part of both the chairman and the directors, of the country they were chosen to administer. Within these last few years this defect has been rectified, and we may now confidently expect that progress will be more rapid.

The north-east coast of Borneo presents a great contrast to that of the north-west, as the land lies low, but is in general very fertile. As long ago as 1852 we marched through the district of Tungku on Darvel Bay, and could not but admire the splendid crops which covered the earth, and the vigour of the growth of the palms and fruit trees.

The principal settlements of the North Borneo Company are Labuan, Padas, Kalias and Sandakan. To Labuan I have already referred. As a centre of native trade it is likely to become important, and Victoria Harbour is often crowded with steamers anxious to secure coal. Its unhealthy stage appears to have passed away; in fact, the whole of North Borneo may be looked upon as fairly healthy, for although on the north-east coast there are many districts where fever is prevalent (an incident common to every tropical country when the jungle is first cut down), yet this malaria disperses in time.

Next to Labuan lie the districts of Padas and Kalias, well filled with an agricultural population, quiet and fairly industrious. Their principal industry is the cultivation of the sago palm and pepper. Padas had been chosen as the starting point of the telegraph line, which has been carried across the country to Sandakan Bay, a distance of three hundred miles. It does not appear to work very successfully, as it is liable to constant interruption from the wires being broken by falling trees. My experience of Bornean forests is that trees seldom fall even during the fiercest storms if their supports are left untouched. The finest forest trees, except the Tapang, have most of their roots running along the surface of the ground, and have a very poor hold, but they are supported in their positions by innumerable creepers, which vary in size from those resembling a ship’s cable in diameter to the most delicate rattan. Cut these braces and the tree is liable to fall. This is so well known to the natives that, when clearing old forests, they only cut the principal trees partly through, except a line of the outermost ones, which are hacked until they give signs of falling. The whole line then comes down, dragging to the earth all the trees partially cut through, as if they were bound together by cords, instead of by Nature’s cables. It is probably the cutting of the telegraphic line through the forest which has weakened the natural supports, and so the trees fall. If any other telegraph line be run it would be worth while trying to make the forest trees serve instead of poles, as these appear to have rotted within the first year.

From the occasional notices in the Herald, the North Borneo official paper, it would appear that the line was cut most of the way through primeval forest, thus opening out millions of acres of virgin land for agriculturists to develop. When the existence of this line is thoroughly understood, and its working can be ensured, it will no doubt induce those ships which trade between Australia and China to call in at Sandakan. Had the line been reliable, no doubt the Spaniards of the Philippines would have used it, in order to telegraph to their Government, instead of going all the way round to Labuan.

But the great experiment in Borneo is the railway. It starts from what may be termed the Padas district, at a point on the coast called Bukau, and the first section is to the Penotal Gorge, about fifty miles in the interior on the way to the east coast. Its course, as traced on the map, will take it well south of east, and it will have its terminus in Santa Lucia Bay. I have seen no reason given why it should not be taken to Sandakan, the headquarters of the Company, and a first-class harbour. It appears a mistake to lessen the importance of the capital, unless there are strong commercial reasons, depending on the tobacco plantations, for diverting its course through an unknown country, close to the Dutch frontiers.

If this railway succeed it will open a new era in Bornean development; and it should succeed, as, with liberal land laws, foreigners and natives will settle along the line and form plantations. But who are the inhabitants beyond the Penotal Gorge? They are mentioned once or twice in the course of the reports as Muruts or Dusuns, who will no doubt work jungle produce as soon as they find a profitable market; in fact, they are doing so now to a small extent. If the promises made to the Company be kept, and sawmills be erected near the western terminus, then the timber trade will give profitable employment to the railway. Neither timber nor jungle produce, however, will make a railway pay, and therefore the Company must be prepared to support cultivators and planters all along the line, and the money will be well and profitably employed. They have themselves started an experimental plantation at Sapong, where tobacco and other products are cultivated with very fair success, and this will encourage others. I shall watch the progress of this railway with the greatest interest, and though there will be many complaints at its slow progress, yet if capital can be found to finish it, it must prove of great benefit to the Company. It is satisfactory to learn, from the latest reports, that the natives are flocking to its neighbourhood, and that they have already cleared the land for a width of three miles on either side of the line.

Gaya Bay has so lately come under the direct control of the Company that nothing has been done yet for its development, but only some of its smaller harbours can be expected to be touched at first. Nearly all the districts in its neighbourhood are, however, fairly populated, and there is considerable cultivation on the rivers Patatan, Ananam and Kabatuan.

Kudat, on Marudu Bay, appears at one time to have been chosen for the Governor’s headquarters, but it showed no promise of rapid development, and they have now been transferred to Sandakan. There is, however, a good deal of cultivation going on, and among the immigrants are several hundred Chinese Christians called Hakkas, who appear to have fled from the persecution of their heathen brethren. These are likely to be a permanent population and should be encouraged, as they are sure to support the Government.

The most important settlement on the mainland of Borneo, within the Company’s grants, is Sandakan. It is a fine bay, fairly healthy, with excellent sites for a town, and is connected by a water passage with the important river of Kina Batañgan, from which a short road leads to the gold workings of Sigama. Its inhabitants already muster, I understand, about three thousand, and it has the principal Government offices, a church, a club, an hotel and some rideable roads. It only wants coal to render it an important port of call, and this is said to have been found not far from the town, and is about to be worked.

The inhabitants of the districts under the sway of the Company are of many different races. The bulk of the population are Dusuns or Idaán, very much like the better class of the Land Dyaks of Sarawak. They are easily governed, and among them head hunting is a tradition rather than a practice, as only in one village that Sir Hugh Low and I visited did we find a head house, or any skulls hung up to the rafters, as is commonly the case in the communities south of the Baram. We stayed in their villages on several occasions, and formed a very favourable opinion of the people.

The above remarks are based upon our observations made in 1858, but, if Mr John Whitehead is not mistaken, these races must have greatly deteriorated, as he writes a good deal about the practice of head hunting among them in 1888. When we were there we heard like reports and met many parties of armed Dusuns, who were said to be on the war-path, but as at the same time we also met numerous parties of Dusun men, women and children carrying tobacco to the coast villages through what was said to be an enemy’s country, we did not pay much attention to such statements. We saw also small parties of women and children working in the fields miles away from their villages, which could not occur if there were any real danger from hostile tribes. Either Mr Whitehead was deceived by similar stories to those which were constantly dinned into our ears, or the Dusuns have sadly deteriorated. These stories of enemies were fabricated chiefly with the object of preventing our visiting neighbouring villages.

I am afraid we should find great changes if we returned to Kina Balu, as Mr Whitehead mentions that the Company have found it necessary to send punitive expeditions against these Dusuns. I trust, however, that this is a mistake.

The next in importance to the Dusuns from their numbers are the Bajaus, who are still often called Sea Gipsies from their wandering habits, but many thousands of them have abandoned their old custom of living in boats and have settled on the lake-like Mengkabong river and in many other places along the north-west coast, until you reach Tampasuk, where, a few miles inland, they are numerous. The Bajaus are also to be found on the north and east coasts, and are there deemed a very useful class, as fishermen and collectors of sea produce for export to the China market.

The Lanuns, of marauding celebrity, lived formerly on the Lower Tampasuk and Padasan rivers, but since their pirate settlements were routed out by Sir Thomas Cochrane in 1846, they have gradually abandoned the coast, and retired to their own country, the great island of Mindanau. Probably a few who have intermarried with the Bajaus may still be left. They were a gallant, courteous people, but too lawless for our times.

On the north-east coast there is a very mixed population of people from the Sulu Islands—some Malays, many Bajaus, and since the advent of the Company, several Chinese and a few Europeans and Madrasees.

In Padas and Kalias and on the rivers to the south of Patatan, there are many Malays from Brunei; Kadayans, who are probably aborigines converted to Islam; many descendants of the ancient Chinese colony, who can still speak their old language, but dress and live like other natives of the island. From these curious mixtures of races are derived the industrious agriculturists of those districts.

The native Borneans of whatever race have shown no power to augment the population. The deaths appear almost to equal the births, but that may arise from the great neglect of the children, and the inability of the natives to combat epidemics—smallpox and cholera sometimes sweeping them off by thousands. These causes of depopulation may lessen under the influence of civilisation, but not to a very great extent.

The Company will have therefore to depend on the Chinese, and perhaps on the Japanese, for the future population, as their industry is undoubted, and the teeming millions of the parent countries can supply endless recruits. But it would be dangerous to rely upon these hard-working but turbulent people alone, and therefore a mixture of Javanese, Boyans and Tamils would be very desirable.

The Company have very rightly based their prosperity on agriculture, and have done much to encourage subsidiary associations in their efforts to cultivate tobacco, and in some respects with very great success, as the produce has been of first-rate quality and fetches very high prices. In fact, the soil appears particularly adapted to this valuable plant, but, as always occurs when any new business is started, insufficient capital, and managers without any idea of economical working, nearly wrecked this promising industry. It now appears to have passed this trying stage and established itself on a firm basis, and its prospects are excellent.

The soil of the east coast, and many districts of the west, appears suited to every tropical cultivation. Coffee, both Liberian and Asiatic, grows with astonishing vigour, even yielding fruit in the third year. In other countries the best coffee is grown on hills at least three thousand feet above the sea level, and planters in Borneo may find it worth their while to attend to this. It is in favour of planters that all the products they have essayed have flourished for generations before the advent of the Company. Coffee is found in the hills round the capital. I sent home excellent specimens of cotton grown on the north-west coast as long ago as in the Fifties, and Saba tobacco was famous and much preferred to the Javanese by all the natives of Brunei. We noticed at Kiau, on Kina Balu, how carefully the Dusuns cultivated their tobacco, keeping the fields perfectly clean. Pepper was grown by the Chinese throughout the last century, so that none of these products are experiments. They have simply to be grown by experienced managers, instead of by the careless native methods.

As yet the search for minerals has not been successful. Gold has been found in many districts, but has not hitherto been worked so as to prove a mercantile success. As, however, alluvial gold has been collected in several streams, the quartz reefs will yet be found, as in Sarawak, where, after more than fifty years of expectation, machinery has been erected to crush the stone. A small company has been formed in London to work the gold found in the sand and gravel banks in the Sigama river, which will be raised from its bed by a dredging machine. The latest accounts are that the dredger is already above the rapids, and had commenced working. There is nothing in the world like gold to attract population.

The geological formation of the great mountain of Kina Balu, and its surrounding ranges, would appear to offer a grand field for geologists, but it is a difficult country to explore, except where the sandstones check vegetation, but these last-named strata are never prolific in minerals.

Since the North Borneo Company has had a business man at their head, and there is a better knowledge of Borneo among the directors, it appears to be going the right way to work to develop the country. It has made some necessary roads; the electric telegraph, though not at present very important in itself, has opened up the interior and shown what may be expected from pushing on the railway through this as yet undeveloped country.

The territory of the State of North Borneo is under the rule of a governor, Mr Beaufort, chosen by the Court of Directors, and under him are many Residents and sub-officers who administer the affairs in the various districts. As the Herald appears to publish only résumés of the reports from the different stations, it is difficult to form any idea of the capacity of the officials or the manner in which they perform their work, but, on the whole, I should say it was satisfactory. However, there is nothing more difficult than to find men to manage natives so as to gain their confidence. As a rule the higher the class from which they are chosen, the greater chance there is of their success.

The State of North Borneo has an armed police, which only numbers four hundred, for their very extensive territory, and it proves how amenable the natives must be to authority that they can keep comparative order. The few outbreaks which have occurred have been easily suppressed, though as yet it is uncertain what will be the future conduct of the last rebel, Mat Sali, and his gang. If terms have been made with him which will in the future keep him quiet, so much the better for all. A portion of the North Borneo armed police consists of Sikhs. It is difficult to exaggerate the admirable conduct of these men during the difficult operations against Mat Sali. In the attacks on his fort their behaviour was simply splendid, and their English officers, both civil and military, were indeed well worthy to lead such men. It is to be regretted that their brave commandant, Jones, was killed. It is easy to criticise the desperate onslaught, and say it was foolhardy, but it is by such gallant contempt of odds that the Empire has been won, and that we can record with pride ‘the Deeds which made the Empire.’ And all this goes on in an almost forgotten part of the world, as a mere matter of duty, without any idea on the part of these brave fellows that their countrymen will ever hear of their noble conduct. Wherever the Sikhs and their English officers may be, we may feel assured of good work being done, as, for instance, in East Africa, with the late Lieutenant Alston and his dashing followers.

The revenue is raised in British North Borneo generally on the lines adopted in other Eastern possessions. The principal source of income is derived from ‘farms.’ The most important are those of opium and spirits. They are the easiest and best methods of raising revenue, as they only touch the weaknesses or the vices of the Chinese, and are generally highly productive; and, where the authorities are not amenable to the influence of ignorant but well-meaning fanatics, the gambling farm is not only productive but has a good moral effect, as experience has proved that the evil is lessened by being concentrated at spots under the surveillance of the police. The farms of pork and fish, and in a lesser degree, perhaps, the pawnbroking, are liable to great objections. The pork farm might be suppressed and public slaughter-houses established, as is done now in Sarawak; and pawnbroker’s licenses might be substituted for that farm, which, in practice, proves so onerous to the poor. The fish farm should be suppressed and an open market substituted. As there is no clear financial statement published, I am aware that I may be criticising in the dark.

Duties on imports are often necessary, and export duties on timber and jungle produce are very defensible, as someone aptly remarked that the collectors only reap the harvest without having been put to the trouble or expense of sowing or planting, and someone must pay for the protection they all enjoy. As a rule, however, duties on agricultural products should be avoided. The tax on nibongs and attaps is something quite original, can produce but a trifle, and must be excessively annoying to the natives, as these are the building materials of their houses.

I will now give the receipts and expenditure in North Borneo for the five years 1893-7, as the receipts are now normal, and not affected by the speculative rush of planters and others, who disbursed money without a thought of the morrow:—

Income.Expenditure.
1893,£31,345£30,338
1894,31,55928,818
1895,37,07533,266
1896,42,84133,015
1897,43,778

As far as it goes this is a satisfactory increase in the revenue, but is a mere bagatelle if we consider the vast territory from which it is produced. But no striking increase can take place until the Chinese feel thoroughly at home there. That North Borneo was once very popular with them is attested by all the accounts we gather from travellers and from native tradition. The very names show how they influenced the country. We have Kina Benua, the Chinese land; Kina Balu, the Chinese widow, the name of the great mountain; Kina Batañgan, the Chinese river (in the written annals of the Court of Brunei, it is mentioned that a Chinese kingdom was established on that river); then we have Kina Taki and Kina Bañgun, the names of small streams in the north. This shows how numerous the Chinese must have been in this territory. The causes of their disappearance are obscure, but may be readily imagined. Bad government in Brunei, the increase of piracy, the cutting off of the junks, the risings against oppression by this unwarlike race led to massacres; in fact, these causes are clear from the accounts of the natives. But where the Chinese have once been, they will come again.

It must be uphill work trying to extract taxes from natives, who, though they are accustomed to be robbed and plundered by their own rulers, are very unwilling to pay even the smallest regular impost. The Sarawak Malays do so readily with their capitation tax, as that payment frees them from the liability of being called out for military service, and the more civilised and industrious they become, the more they appreciate this freedom from liability. The capitation tax is a just one, though often it requires great caution in its collection to avoid discontent. As a rule it should not be collected in those districts in which the Company have no permanent officers located. Flying visits often do more harm than good. It is difficult to see how any addition can be made to the taxation. The State of Borneo must trust to the gradual development of the country and to the increase of its population, but all trammels on the free circulation of traders should be removed.

It is evident from the trade returns of North Borneo that the country is progressing. Take the statistics for the same five years:—

Imports.Exports.
1893,$1,116,714$1,780,593
1894,1,329,0661,698,543
1895,1,663,9062,130,600
1896,1,882,1882,473,753
1897,1,887,4982,942,293

The dollar is now only worth two shillings. I do not know if these returns include those of our Colony of Labuan. I believe not, as no mention is made of the export of coal in the detailed lists.

Tobacco is the most important article of export. There are several companies busily engaged in developing this industry, as the Bornean leaf has now taken a high position in the markets, and its quality is excellent. It not only furnishes the leaves used as wrappers, but as a smoking tobacco it has met with much favour. The principal plantations are in the north-eastern coast, near the river Kina Batañgan and Darvel Bay. The Government are also trying an experiment on the Sapong line, which will be followed by the railway. The tobacco which was so sought after by the natives in old days was, however, a product principally of the north-west coast. It would probably be advantageous to find out the exact spots where the Saba plants were grown. There is very little likelihood of there being a glut of tobacco on the market, as many of the old sources of supply are drying up, as in Cuba, and, to a lesser extent, in Manila, and the recent judicious reduction of duty in England will increase its consumption. I have no sympathy with those who would instead have lowered or abolished the duty on tea, as if tea drinkers should not contribute to the support of our navy, which secures the arrival of their favourite leaf.

The production of coffee, cotton, gambier and pepper are as yet on a very small scale, as most of the plantations are in their infancy. Pepper used to be grown to a considerable extent in the districts opposite, and a little north of Labuan, but here, as elsewhere, no doubt, the exceedingly low prices may have induced the natives to neglect the cultivation of this vine. Sarawak now produces about 15,000 tons of gambier, worth $700,000. This should encourage planters in North Borneo.

Cutch, manufactured from the bark of the mangrove tree, has became a very important export, and the development of this industry can only be limited by the demand. Gutta and rubber are of some importance, and rattans are taking an important place in the list of exports, and so are sago flour and timber. Although as a rule export duties on cultivated products are to be avoided, there are many good reasons why the Government should put a duty on tobacco, which, however, is so very light, only one per cent., as scarcely to affect its price, whilst the sum so raised is of importance to the Treasury. The police and other expenses connected with the protection of this industry are considerable.

In reading over the reports in the North Borneo Herald, I have noticed the tendency of the officers in charge of districts to interfere with the movements of traders. One will only allow certain men to go into the interior to collect jungle products, but they must not take with them merchandise to barter with the natives; another objects to traders going into the interior to buy produce there, as it prevents the aborigines coming down to have ‘a glimpse of civilisation’; a third charges for permits, which induces people to get into the Company’s interior districts from the Brunei territory, and to return that way, thus depriving the Government of its export duties (to this I notice Mr Maxwell objected); a fourth is afraid that the Chinaman will cheat the innocent Dusun, but after a very short time the latter becomes a very good match for the trader. I remember certain natives bringing hundreds of pikuls of worthless gutta, carefully coated over with the genuine article, to the bazaar in Sarawak. The Chinaman tested it, and finding no stones concealed inside the lumps, bought it at rather a high price, but was surprised to find on its being sent to Singapore that it was unsaleable. I do not think, therefore, that the officers of the State of North Borneo need trouble themselves about the trading incapacity of the Dusuns. But the scales and weights of the Chinese should be periodically tested, as this is their favourite method of cheating the unwary.

I have always objected to these restrictions on trade, and to the free movements of traders, as they existed in Sarawak. They owed their origin there, as in North Borneo, to the jealousy of the native chiefs, who do their utmost to monopolise the trade themselves, and therefore counsel the English officers not to allow Chinamen to penetrate into the interior. I would give perfect liberty to everyone, and this would not only increase the number of traders, but add considerably to the exports.

I have considered with great attention the negotiations which took place between the directors of the British North Borneo Company and the present Rajah of Sarawak, Sir Charles Brooke, and I have come to the conclusion that the shareholders were perfectly right not to part with their territory or resign its management. The Rajah would have found this great increase of dominion very burdensome, and I should be inclined to doubt whether Sarawak possesses either the capital or the staff to enable her thus to increase her responsibilities. Sarawak, as I have observed, has generally failed to attract English capital, and although the Rajah has governed his own territories with eminent success, it does not follow that he would have succeeded in so developing North Borneo as ever to have been able to pay the shareholders a dividend. They have already waited seventeen years, with an occasional trifling return, and probably they may have to wait some time yet, as the country has been but very partially opened out, but that there is a great future before North Borneo, I have full confidence.

When the State of North Borneo has advanced sufficiently, it might follow the example of the old East India Company—convert the capital of the association into stock at high interest to compensate for past losses, and then, under a Court of Directors, devote the whole of the revenue of the State to the advancement of the interests and welfare of the country. This solution would no doubt be satisfactory to everyone connected with the enterprise.