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BORNEO with the railway, is in contemplation. The population of the Company’s territory is about 200,000 (including 20,000 Chinese). Of this total three-fourths are found in the west coast districts. Sandakan, the capital, has a population of nearly 7000. The seashore and the country for a few miles inland on the west coast are inhabited for the most part by Malay settlers originally from Brunei, by Bajaus, the descendants of the lawless pirate hordes once the terror of these seas, by Kadayans, who are also Mahommedans, and by Dusuns. The last are the most numerous. The east coast is less thickly peopled, but its inhabitants are almost entirely Bajaus and settlers from the neighbouring Sulu archipelago. The interior of the territory is inhabited almost entirely by Muruts, a debased race filled with savage instincts, whose habits are both unclean and debauched, men, women, and children alike being addicted to the excessive use of intoxicating liquors of native manufacture. Tribes of Dusuns are also found in villages scattered over the interior, but there can be little doubt but that the Muruts are the representatives of the aboriginal race of this portion of the island. The Dusuns have attained to a far higher stage of civilization than have the Muruts. They cultivate rice with considerable skill, and show great ingenuity in the management and construction of their irrigation work. Very few anthropological data are yet available concerning either the Dusuns or the Muruts, and it is impossible to pronounce with any certainty as to the stock to which they belong. Probably the theory that they do not properly belong to the Malayan family will prove to be well founded. On the other hand, the Bajaus and the Kadayans as well as the Bruneis undoubtedly are Malayan. The climate of North Borneo is tropical, with a very equable temperature, and a steady, sufficient, but not excessive rainfall. The lowest reading of the thermometer recorded in 1899 at Sandakan was 72° Fahr. in January, June, July, and August. The maximum in the shade recorded at Sandakan during 1899 was 94° in August. The highest rainfall recorded on the coast during 1899 was 136'/6 inches. The records made in the interior are unfortunately not trustworthy, but they certainly largely exceed those made on the coast. The capabilities of the Company’s territory are only dimly known. Coal has been found in the neighbourhood of Cowie Harbour, the quality of which is stated to be superior to any hitherto discovered east of Suez. Gold in alluvial deposits has been found in the beds of several rivers on the east coast, but as yet no reefs or lodes, and no large alluvial beds have been discovered. No trace of tin in payable quantities has yet been found, but the country has hitherto been little exploited by trained geologists or prospectors, and it would be premature to express an opinion as to the mineral wealth or poverty of the territory. The oil-springs of British North Borneo have as yet proved less satisfactory than those of other parts of the island. Iron ores have been found, and there are indications of the existence of copper, antimony, and zinc ores. The wealth of the country still lies chiefly in its jungle produce—gutta, rubber, rattans, mangrove-bark, edible nuts, guano, &c. ; in its timber, which is of excellent quality, supporting a large export trade to Hong-Kong and the Philippines; and in its planting produce, of which tobacco, sago, sugar-cane, cocoanuts, coffee, pepper, and gambier are the principal items. There are twelve large tobacco estates now open, which have produced satisfactory results, the leaf grown being peculiarly well suited for the wrapping of cigars, and possessing, it is said, some of the special qualities of the Havana leaf. In 1886 the crop yielded 27 bales, valued at £471, but in 1897 the bales had grown to 10,469, and the value to £168,600, the value in 1898 being £200,000. There are forty-three estates planted with coffee and cocoanuts, three with Manila hemp, three with pepper and gambier. Rice is grown in large quantities in many parts, and it is probable that, when means of communication have been further improved, this will form an important item of export. The birds’-nests exported from the caves of the interior and on the coast bring in a steady annual revenue ; and as the country is becoming daily more peaceful, new caves in the interior are annually being exploited by those who know how to avail themselves of their wealth. The trade is largely in the hands of Chinese shopkeepers, who send their agents to the interior to attend the Tamus

.313 (Malay, Temu, to meet) or fairs which are the recognized scenes of barter between the natives of the hills and those of the coast. At Sandakan there is a Chinese population of over 2000 souls. The Sabah Steamship Company, subsidized by the Chartered Company, possesses a number of boats which ply along the coast of the Company’s territory, calling at all important points, and facilitating communication between the various stations. A German firm in Singapore runs vessels at short intervals between that port and Labuan and Sandakan, calling also at some of the other principal ports of the Company’s territory. There is also frequent steamship communication between Sandakan and Hong-Kong, which is distant four days steaming from the former port. For administrative purposes the territory has been divided into nine provinces : Alcock and Dewhurst in the north ; Keppel on the west; Martin in the centre; Myburgh, Mayne, and Elphinstone on the east coast; and Dent and Cunliffe in the south. The boundaries of these provinces, however, are purely arbitrary, and are not accurately defined. The territory is governed by a governor, who is appointed by the Court of Directors with the approval of the Secretary of State for the Colonies. The governor is assisted by a council which is composed of several of the senior officials and one non-official member. The administration is carried on by means of a civil service which is recraited by a system of selection. The officers in charge of Labuan, Kudat, and Darvel Bay possess the rank, and title of resident. The officers administering the other districts are called district magistrates. The judicial work of the territory is performed by the residents, who hear appeals from the district courts, and by the governor, who is the final court of appeal. The Company’s police force, which is officered by Europeans, is composed of Sikhs, Pathans, Punjabi Mahommedans, Dyaks, and Malays. The force numbers six hundred men of all ranks. Until recently expeditions were necessary almost annually to quell disturbances in the interior, the more serious of which were those fomented by the noted rebel, Muhammad Saleh, who was killed fighting against the Government on 31st January 1900. The country is now rapidly becoming pacified, and the natives of the interior are found to be very amenable to European rule. The laws are based on the Indian penal, criminal, and civil procedure codes, and local proclamations and ordinances. There is an Imaum’s court for Mahommedan law. In 1888, by a convention dated between the British North Borneo Company and the British Government, the Company made over the control of its foreign relations to the British Government in consideration of being placed under the protection of Great Britain. On 1st January 1890 the Crown colony of Labuan was handed over to the British North Borneo Company by the Colonial Office for administrative purposes, the Secretary of State arranging for the issue of the necessary commission as governor of Labuan to the officer who for the time being might be approved by him as governor of British North Borneo. In 1899 it was decided to occupy the Tambunan country in the interior of British North Borneo, with an area of 500 square miles and a population of 25,000. As regards religion and education, there is a Protestant mission which supports a church and school at Sandakan, with branches at Kudat, Labuan, and Kaningow. The Roman Catholic mission maintains several priests and chapels throughout the territoiy, with headquarters at Sandakan. The Chinese have their josshouses, and the Mahommedans their mosques. The following are statistics of revenue, expenditure, and trade

Revenue j proper / Land sale Expen- ) diture J Exports Imports

1898. 1899. Dollars. Dollars. Dollars. Dollars. 407,207 436,062 503,307 542,919 4,492 964 2,061 3,210 313,807 341,124 381,807 369,351 2,473,753 2,942,293 2,839,844 3,439,560 1,882,188 1,887,498 2,419,087 2,456,988

1900. Dollars. 587,226 799 402,858

About a million acres have been alienated by the Government on leases for 999 years. Shipping entered, in 1900, 110,908 tons ; cleared, 111,385 tons, of which German ships rvere 47,125 tons entered, and 47,125 tons cleared, and British were 34,616 tons entered, and 34,522 tons cleared. The Company has a copper coinage of 4 and 1 cent pieces, and issues notes expressed in dollars and cents. Mexican, Straits Settlements, Hong - Kong, and British dollars are treated as currency. There are bank agencies in Sandakan, and the Company does banking business when required. The State, which has adopted the imperial penny postage, is in the Postal Union, and money orders on North Borneo are issued in the United Kingdom, India, the Straits Settlements, Ceylon, Hong-Kong, and elsewhere, and vice versa. The main telegraph runs from Menumbok on the AA’est to Sandakan on the east, and a line is also being made from S. IT. — 40