No better spot could be chosen as one of the stations for the telegraph wires on their way’ to China. From Singapore, stated in round numbers, to Sarawak is 400 miles; to Labuan, 350 miles; to Manilla, 600 miles; to Hong Kong, 600 miles more. If Manilla be avoided, a station might be formed on one of the isles off Palawan. Labuan, managed by an officer who made himself well acquainted with the character of the people inhabiting the neighbouring countries, might, with a slight support from the navy, exert great influence. I must mention one good Labuan has already done: it has changed the character of slavery. Formerly, the Bornean masters could treat their dependants as harshly as they pleased; now it is a common saying, “If we are not gentle towards our slaves, they will run to Labuan.” In fact, latterly very little restraint was laid on the freest intercourse with this island on the part of the masters, as far as concerned the males; but the females they tried by every means to prevent leaving. Yet hundreds of women visit Labuan, and can stay there if they please. The trade of our colony is small, though it is increasing, while that of Brunei is rapidly decreasing, and recent arrangements will tend to accelerate its fall. I should mention that there are many districts in the neighbourhood of Labuan in which pepper is cultivated, and this produce is slowly increasing in quantity in the market; but could the Governor of Labuan have the means at his disposal to influence the neighbouring coast, the pepper cultivation would rapidly advance. It is now grown in the districts of Kalias, Bundu, Tanah Merah, Qualla Lama, Membakut, Papar, Mengkabong, and Tawaran. Sago at present is the principal export, though some valuable products, as white birds’ nests, camphor, wax, rattans, and occasionally pearls are brought from the north. No place could be better situated than Labuan to draw to it the trade of the Sulu archipelago and of the north-east coast of Borneo, and its doing so will depend on the amount of influence it is permitted to exercise. It is a curious circumstance, that the natives of many of the districts to the north of Labuan assert that before civil strife and pirates drove trade from their coasts, they used to supply the Chinese and Javanese markets with a large amount of cotton. This plant is still cultivated, though to a very limited extent.