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- 3.It is considered that the most effective way to achieve our purposes will be :—
- (a) To acquire from the British North Borneo (Chartered) Company the sovereign and administrative rights which they possess and have hitherto exercised; and thereafter to provide for the future government of the territory on its liberation by an Administration under the direct authority of His Majesty's Government.
- (b) To incorporate the present Settlement of Labuan in the new Administration for North Borneo.
- (c) To conclude new treaties with the Sultan of Brunei and the Rajah of Sarawak at the earliest opportunity which will accord to His Majesty such jurisdiction in their States as will enable His Majesty to legislate for these territories under the Foreign Jurisdiction Act to the fullest extent. In the case of Sarawak, the new treaty should also secure the acceptance by the Rajah of a resident British Adviser whose advice must be sought and acted upon in all substantial matters of policy and administration. (The present treaty with Brunei already provides for a resident British Adviser.)
- 3.The territories in Borneo are still comparatively undeveloped and they have few racial or other affinities. At this stage, therefore, the basis for closer union between them hardly exists. Community of policy and of administrative action can, however, be assured from the outset under the direction of the Governor-General at Singapore, whose appointment is recommended and the promotion of closer union should be a continuing matter of our policy.
