"The principal feature is the weakness of the governments, both of the capital and its dependencies; and in consequence of this weakness there is a strong desire for European protection, for European enterprise, and for any change effected by Europeans. Supposing Labuan to be taken as a naval post, I consider that European capital might with safety be employed in Bruni. "In the rivers contiguous to Sarawak the presence of Europeans would be hailed with joy, not only by the Dyaks, but by the Malays; and subsequently it would depend on their own conduct to what degree they retained the good-will of the natives; but with ordinary conciliation, and a decent moral restraint on their actions, I feel assured that their persons and property would be safe, and no obstruction offered to fair trade or to mining operations. "Supposing, as I have before said, the occupation of Labuan by the English, our influence over the government of Bruni would be complete; and one of our principal objects would be to maintain this ascendency, as a means of extending our trade. "Our position at Labuan would, it must be borne in mind, differ from the position we occupied in relation to the native princes in Singapore. In the latter case, the native princes were without means, without followers, and with a paltry and useless territory, and became our pensioners. In the case of Labuan, we shall have an acknowledged independent state in our vicinity; and for the prosperity of our settlement we must retain our ascendency by the support of the government of Muda Hassim. Let our influence be of the mildest kind; let us, by supporting the legitimate government, ameliorate the condition of the people by this influence; let us pay every honor to the native princes; let us convince them of our entire freedom from all selfish views of territorial aggrandizement on the mainland of Borneo, and we shall enjoy so entire a confidence that virtually the coast will become our own without the trouble or expense of possession. I have impressed it on the Rajah Muda Hassim and Pangeran Budrudeen, that the readiest and most direct way of obtaining revenues from their various possessions will be by commuting all their demands for a stated yearly sum of money from each; and by this direct taxation, to which Muda Hassim and his brother seem ready to accede, the system of fraud and exaction would be abolished, the native mind tranquillized, and the legitimate government would become the protector rather than the oppressor of its dependencies. By this measure, likewise, a tone might be imparted to the native chiefs and rulers of rivers, and the people at large taught to feel that, after the payment of a specified sum, a right existed to resist all extra demands. Beside this, these rajahs are convinced that a certain yearly revenue is what they require, and is the only means by which they can retain their independence; and I have impressed it on their minds that, to gain a revenue,