The revenue is raised in British North Borneo generally on the lines adopted in other Eastern possessions. The principal source of income is derived from ‘farms.’ The most important are those of opium and spirits. They are the easiest and best methods of raising revenue, as they only touch the weaknesses or the vices of the Chinese, and are generally highly productive; and, where the authorities are not amenable to the influence of ignorant but well-meaning fanatics, the gambling farm is not only productive but has a good moral effect, as experience has proved that the evil is lessened by being concentrated at spots under the surveillance of the police. The farms of pork and fish, and in a lesser degree, perhaps, the pawnbroking, are liable to great objections. The pork farm might be suppressed and public slaughter-houses established, as is done now in Sarawak; and pawnbroker’s licenses might be substituted for that farm, which, in practice, proves so onerous to the poor. The fish farm should be suppressed and an open market substituted. As there is no clear financial statement published, I am aware that I may be criticising in the dark. Duties on imports are often necessary, and export duties on timber and jungle produce are very defensible, as someone aptly remarked that the collectors only reap the harvest without having been put to the trouble or expense of sowing or planting, and someone must pay for the protection they all enjoy. As a rule, however, duties on agricultural products should be avoided. The tax on nibongs and attaps is something quite original, can produce but a trifle, and must be excessively annoying to the natives, as these are the building materials of their houses. I will now give the receipts and expenditure in North Borneo for the five years 1893-7, as the receipts are now normal, and not affected by the speculative rush of planters and others, who disbursed money without a thought of the morrow:— Income. Expenditure. 1893, £31,345 £30,338 1894, 31,559 28,818 1895, 37,075 33,266 1896, 42,841 33,015 1897, 43,778 ...