In a political view, the contiguity of the islands to our possessions in New Holland and India, and the command over China, are sufficiently apparent; and commercially, it would only be necessary to quote their productions to prove their value. The difficulty of once more placing our interests on a footing worthy a great nation is no doubt considerable, but apt to be greatly overrated; as the unpopularity of the Dutch, and the weakness of the native states, would ensure success to an establishment aiming at sufficient results by slow but steady means. The question, indeed, is not one embracing the acquisition of territory, but its _occupation_: viz., whether England shall claim and improve lands she holds by as good a title as any the Dutch can show, and whether, doing so, she shall use the full ascendency of her national position to extend her commerce, and distribute her manufactures among a people who have always, when permitted, shown their craving for mercantile adventure? A strong government established in Malludu[14] Bay, a British territory capable of extension, and possessing internal resources, having sufficient authority to cultivate a good understanding with the native governments, and spread inferior posts over the Archipelago, as opportunities offered, would effect this object, and, without infringing upon the claims of any foreign state, ensure a commercial footing on a scale never yet developed in this portion of the world. Malludu Bay, situated at the northern extremity of Borneo, has been mentioned as best adapted for the purpose in view on several accounts. 1st. It is a British possession. 2nd. There is no great Malay or Bugis settlement in its vicinity. 3rd. It is the place where, in all probability, a direct intercourse may be held with the Dyaks of the interior. 4th. The position relative to China is advantageous. 5th. It forms the western limit of the Archipelago, and our new settlement at Port Essington bounds it to the eastward. The climate and the soil are well spoken of: a river flows into the bay, and is reported to communicate with the lake of Keeny Balloo[15] and the mountains in the interior—one of very considerable elevation. Above all, however, the natives are reported to be docile and easily taught; the servants of the Company attached to their settlement of Balambangan were decided in opinion that this bay was far preferable in every respect to the station chosen and subsequently abandoned. Supposing these advantages to be as above stated, yet it would scarcely authorise any active steps being taken without a more accurate knowledge than we at present possess of the particular locality and of the States in its vicinity; it is to this point that I would direct attention, remarking, however, that although Malludu Bay should on inquiry be found to be unfit for the purposes of colonisation, yet the general view of our policy remains unaffected, as it would be only necessary to obtain a suitable place.