The following observations extracted from Brooke’s journals are remarkable: ‘I must mention the effect of European domination in the Archipelago. The first voyagers from the West found the natives rich and powerful, with strong established governments and a thriving trade. The rapacious European has reduced them to their present position. Their governments have been broken up, the old states decomposed by treachery, bribery and intrigue, their possessions snatched from them under flimsy pretences, their trade restricted, their vices encouraged, their virtues repressed, and their energies paralysed or rendered desperate, till there is every reason to fear the gradual extinction of the Malay. Let these considerations, fairly reflected on and enlarged, be presented to the candid and liberal mind, and I think that, however strong the present prepossessions, they will shake the belief in the advantages to be gained by European ascendency, as it has heretofore been conducted, and will convince the most sceptical of the miseries immediately and prospectively flowing from European rule as generally constituted.’ The above observations naturally apply to the Dutch and Spanish systems, which at that time alone had sway in the Archipelago, as England, with its small trading depots, did not actively interfere with the native princes. Yet it must be confessed that Borneo proper, which had generally escaped interference from their European neighbours, fell from a position fairly important to the most degraded state, entirely owing to the incapacity of its native rulers and not to outside influences. The visits to Sarawak and Celebes tended to confirm Brooke’s convictions that, if England would but act on a settled plan and on a sufficient scale, she could still save and develop the independent native states, without any necessity of occupying them. In the year 1776 the Sultan of Sulu ceded to England all his possessions in the north of Borneo, and the East India Company formed a small settlement on the Island of Balambangan; this being on a very inefficient scale, was easily surprised by pirates and destroyed. Later on another attempt was made by the Company to establish themselves on the island, but it was soon abandoned.