Nothing has tended more decidedly to the deterioration of the Malayan character, than the want of a well defined and generally acknowledged system of law and commercial regulation. The Malayan nations had, in general, made considerable progress in civilization, before the introduction of the Mahometan religion among them: they had, accordingly, regular institutions of their own, some of which were probably of considerable antiquity, derived from the continent of India, and consequently radically different from those of the Arabs.

Some difficulty appears to have occurred in adapting these institutions to the general tenor of the Mahometan law, and many anomalous ones appear accordingly to have sprung up in different states. These occur in every part of jurisprudence, whether commercial, civil, or criminal, and are recited in the Undang úndang and Adat Maláyu, which are the systems of national law among the Maláyus. They vary considerably from each other in different states, and still more from the generally acknowledged principle of Mahometan law, as received by the Arabs. Hence there is, in almost every state, a constant struggle between the adherents of the old Malayan usages and the Hájis, together with other religious persons, who are desirous of introducing the laws of the Arabs, in order to increase their own importance.

Among the numerous and important evils which result from this complex and ill-defined system, may be reckoned its affording an opening for the caprice and tyranny of the rulers, and producing a general insecurity both of person and property.

The state of the Moslem religion is very different here from what it is in the old Mahomedan states, such as Persia, Turkey, or Arabia. In many of the Eastern Islands paganism still remains: in some districts there are many Christians, and the Chinese swarm in every Malayan country, and live intermingled with the Mahomedans. This mixture of religion and tribes has tended, in some degree, to soften the intolerance of the Mahomedan system among the Malayan nations, and neither the positive authority of Islam, nor the persuasions of their Arab teachers, have hitherto been able to induce them to abandon entirely their own peculiar usages and customs. With some of these usages, especially those which relate to wrecks on the Malayan shores, and the commercial regulations of the different ports, it becomes incumbent on the supreme European authority to interfere. In revising these, the opportunity might perhaps be taken to procure the abandonment of some of those maxims and usages, which have the strongest tendency to prevent their improvement, and counteract the habits of civilized life.

A circumstance highly injurious to the commerce of the Malayan nations is the trading monopoly, which in most of the Malayan ports is actually assumed by the chiefs. Of this monopoly there is no trace in the Undang úndang of the Maláyus, or in the fragments of their history which have yet come to light, and it is a question whether this pernicious practice has not been copied from the monopoly regulations of the Dutch. Where this system has been fully carried into effect, it has generally succeeded effectually in repressing industry and commercial enterprize; and where it has been for some time established, its evils have been felt so deeply, that it may be presumed the Malayan chiefs might be induced to relinquish it in favour of a regulated commerce, whenever they might regain the power of collecting regular duties in lieu of it. The Malayan laws and customs are fortunately of a very different kind from those adopted among the great nations of the continent in their vicinity. These nations, especially the Siamese and Cochin Chinese, have long been accustomed to look up to the Chinese, with whom they coincide in religion and manners, and from whom they have adopted their exclusive maxims of foreign intercourse. The Málayus, on the other hand, though accustomed to look up to the Arabs as their religious instructors, seldom hesitate to admit the superiority of both the Europeans and Chinese, both to themselves and to the Arabs, in the arts of life and general science; and it is certainly our interest to encourage them in this mode of thinking, and to prevent the increase of the Arab influence among them.

The Dutch nation appears to have pursued, as a principle of policy, the propagation of Christianity among the Eastern Islands. The same object had been previously followed by the Portuguese with great success, and there are now several small islands in the Malayan Archipelago, inhabited almost exclusively by Christians of the Catholic persuasion. In many other islands the Protestant persuasion has made considerable progress, and teachers, in the flourishing times of the Batavian Regency, were dispersed over all the low chain of islands which extend from Báli and Lumbok (Sásak) to the great island Timor. The islands in which the Christian faith has been most extensively diffused are the great island Endé or Meng' arái, the great island of Tímor, and the several small islands in the vicinity, and Amboina. In many of these islands the natives having no written character of their own, have been instructed in the Roman character, and taught to read Malayan and other dialects in it There have also been various formularies printed for their use, and translations have been executed for them in some of their languages, which have little or no affinity to the Malayan. The propagation of Christianity among these islands is obviously liable to none of those objections which have been urged against its missionaries on continental possessions. A great proportion of the natives are still pagans, under the influence of a wild and almost unintelligible superstition, the principles of which are not recorded in books, but are handed down, like stories of ghosts, fairies, and witches, with all the uncertainty of tradition. In most instances, the people, though they stand in great awe of the priests or enchanters, or dealers with invisible spirits, are very little attached to the superstition in which they are educated. Many of them are said to be very desirous of procuring instruction, and in some places they look up with a degree of veneration to the Mahomedans, as a people who have received something which they still want.

These observations on the Malayan Islands in general, apply to no part of the Archipelago more than to the important and great island of Borneo.

Borneo is not only one of the most fertile countries in the world, but one of the most productive in gold and diamonds[71]. Its camphor is the finest known, and it is thought capable of producing every kind of spice. Its eastern coasts, which abound in sago, also furnish a greater quantity of birds'-nests, sea-slug, and other commodities in great demand in the Chinese market, than the other islands of the East; but the interior has never been explored by Europeans. It may be conjectured, that the ignorance of the state of the country is one of the principal causes that no European settlement on it has hitherto proved advantageous, but has generally been abandoned after a short trial. The only exception to this observation is the Dutch settlement of Bánjer-másin, which continued from 1747 to 1810, when it was formally abandoned by Marshal Daendals to the Sultan, by agreement, for the sum of fifty thousand Spanish dollars. The Sultan soon after sent an embassy, inviting the English to settle; and previous to the conquest of Java, the Earl of Minto received the ambassadors at Malacca, and accepted their invitation.

The only territory to which the Dutch had any claim on the island of Borneo, was the coast from Súkadána to Mempáwa; this territory they acquired by virtue of a cession from the Sultan of Bantam in 1778. They destroyed Súkadána, and established factories at Pontiána and Mempáwa, which however they abandoned as unproductive after a period of fourteen years.

In no other part of the island of Borneo has there been any European settlement. The English, in 1772, intended to have established a factory at Pásir, but they abandoned the design on some commotions taking place in that state. Its object was to make Pásir a depót for opium and India piece goods, and for the contraband trade in spices. In 1774, a short time after the first settling of Balambángan, Mr. Jesse was deputed as Resident to Borneo proper, and concluded a treaty with that state, by which he acquired for the settlement of Balambángan the exclusive trade in pepper, stipulating in return to protect Borneo from the piratical incursions of the Súlu and Mendanáwi men. Neither of the parties, however, fulfilled its agreement, though the Residency at Borneo was continued for some years after the first breaking up of the settlement of Balambángan in 1775.