From the very first Raffles fully realized the value of the acquisition. On the 19th of February, 1819, he writes that he has found "at Singapore advantages far superior to what Rhio afforded." And in the same letter he says, "In short, Singapore is everything we could desire, and I may consider myself most fortunate in the selection; it will soon rise into importance, and with this single station alone, I would undertake to counteract all the plans of Mynheer."

Raffles was not able to remain for more than a few days at Singapore. He hurried on to Achin, and, after completing the object of his mission there, returned to his residency at Bencoolen. But the new settlement rapidly progressed under Colonel Farquhar's able administration. A year afterwards, this officer writes to Raffles that "nothing can possibly exceed the rising trade and general prosperity of this infant colony." He adds, "Merchants of all descriptions are collecting here so fast that nothing is heard in the shape of complaint but the want of more ground to build on."

In spite of this immediate assurance of prosperity, it remained for a long time uncertain whether the British Government would maintain the settlement.

The right of possession was from the first disputed by the Dutch. Raffles himself succinctly states in a letter to Marsden the basis upon which this rested. It appears, from his letter, that the Dutch had secured the cession of Rhio from the Sultan of Lingen, whom they recognized as the Sultan of Johore. On his arrival at Singapore, Raffles was visited by one of the two chief hereditary officials of Johore, who represented to him that an elder brother of the Sultan of Lingen was the legal successor to that throne, adding, that as the Dutch had negotiated with an incompetent authority, it was still open to the English to effect a settlement on the territory of Johore. This elder brother was subsequently recognized by the nobles at the court of Johore, and it was with this personage, in his capacity of Sultan of Johore, that Raffles concluded his treaty, and obtained permission to establish his settlement. The Dutch, on the other hand, maintained that the Sultan of Lingen had been legally invested with the sovereignty of Johore at the time of the occupation; and, therefore, that the permission accorded to Raffles was worthless. In a letter bearing date July 19, 1820, a correspondent writes to him from London—

"You are probably aware of the obstacles which have been opposed to the adoption of your measures, and even threatened your position in the service. Your zeal considerably out-stepped your prudence, and the first operations of it became known at an unfavourable juncture. It was thought that the state of affairs in Europe required that they should be discountenanced.

"The acquisition of Singapore has grown in importance. The stir made here lately for the further enlargement of the Eastern trade fortified that impression. It is now accredited in the India House."[32]

Undoubtedly the Dutch were making strong endeavours at this time to procure the removal from the East of a man who had shown himself so resolute and capable an opponent of their commercial system. Raffles himself writes from Bencoolen in July, 1820, "After all, it is not impossible the ministry may be weak enough to abandon Singapore, and to sacrifice me, honour, and the Eastern Archipelago to the outrageous pretensions of the Dutch." Fortunately he had powerful friends, and he was not immediately recalled. Meanwhile he continued to hold the settlement on his personal responsibility against the efforts of both the British and Dutch East India Governments. In eighteen months it had grown from an insignificant fishing village to a port with a population of 10,000 inhabitants. During the first two and a half years of its existence Singapore was visited by as many as 2889 vessels, with an aggregate burden of 161,515 tons. The total value of its exports and imports for the year 1822 amounted to no less than 8,568,172 dollars.[33]

Raffles returned to Singapore on the 10th of October, 1822, on his way to England. He remained in the settlement for nine months, and during this time employed himself in laying-out the city, and in drawing up rules and regulations for the government of its people. In one of his letters he expresses a hope "that, though Singapore may be the first capital established in the nineteenth century, it will not disgrace the brightest period of it."

The position of Raffles in respect to Singapore was indeed remarkable. Though a servant of the company for five years, he was personally responsible for the administration of the settlement, and neither the Bengal Government nor the Court of Directors in London would relieve him. In the report which he sent to the Bengal Government before returning to England, he states the main principles upon which he has based the regulations which he framed. At the head of them stands a declaration of the principle of free trade.

"First I have declared that the port of Singapore is a free port, and the trade thereof open to ships and vessels of every nation, free of duty, equally and alike to all." It was a hatred of their monopolist policy which had especially inspired Raffles in his opposition to the Dutch. In respect of the question of the authority of his legislation, he writes that he considered himself justified in thus provisionally legislating for the settlement by reason of the existence of "an actual and urgent necessity for some immediate and provisional arrangements." He further states that in framing these regulations he has, while giving due weight to local considerations, "adhered as closely as possible to those principles which from immemorial usage have ever been considered the most essential and sacred parts of the British constitution."