Owing to the expense of procuring coolies and to the fact that every operation of tobacco planting must be performed punctually at the proper season of the year, and to the desirability of encouraging coolies to re-engage themselves, it is manifestly the planters' interest to treat his employés well, and to provide, so far as possible, for their health and comfort on the estate, but, notwithstanding all the care that may be taken, a considerable amount of sickness and many deaths must be allowed for on tobacco estates, which, as a rule, are opened on virgin soil; for, so long as there remains any untouched land on his estate, the planter rarely makes use of land off which a crop has been taken. In North Borneo the jungle is generally felled towards the end of the wet season, and planting commences in April or May. The Native Dusun, Sulu and Brunai labour is available for jungle-felling and house-building, and _nibong_ palms for posts and _nipa_ palms for thatch, walls and _kajangs_ exist in abundance. Writing to the Court of Directors in 1884 I said:--"The experiment in the Suanlambah conclusively proves so far that this country will do for tobacco. * * * There seems every reason to conclude that it will do as well here as in Sumatra. When this fact becomes known, I presume there will be quite a small rush to the country, as the Dutch Government, I hear, is not popular in Sumatra, and land available for tobacco there is becoming scarcer." My anticipations have been verified, and the rush is already taking place. The localities at present in favour with tobacco planters are Marudu Bay and Banguey Island in the North, Labuk Bay and Darvel Bay in the neighbourhood of the Silam Station, and the Kinabatangan River on the East. The firstcomers obtained their land on very easy terms, some of them at 30 cents an acre, but the Court has now issued an order that in future no planting land is to be disposed of for a less sum than $1[21] per acre, free of quit-rent and on a lease for 999 years, with clauses providing that a certain proportion be brought under cultivation. At present no export duty is levied on tobacco shipped from North Borneo, and the Company has engaged that no such duty shall be imposed before the 1st January, 1892, after which date it will be optional with them to levy an export royalty at the rate of one dollar cent, or a halfpenny, per lb., which rate, they promise, shall not be exceeded during the succeeding twenty years.