most easterly district of Borneo, and dependant on the Suluhs, produces gold, birds'-nests, the species of red wood called lakka, and some camphor. Considerable quantities of sea-slug and tortoise-shell may also be procured from the numerous shoals and islets along the coast.

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These extracts serve to confirm the observations already made on the subject of the general produce of the Eastern islands; and it may be assumed from them, that although the commodities thus to be immediately obtained would not of themselves furnish a return-cargo of sufficient value to repay a direct commercial intercourse with the north and north-east coast of Borneo, there is abundant ground for considering it an auxiliary in a general plan, the object of which would be, to encourage and protect a coasting trade, in order to collect articles for the China market in exchange for the manufactures of Europe.

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But it is not in this temporary point of view only that the subject ought to be contemplated: enough is known of the island of Borneo, to justify a conclusion that it promises to prove in, time abundantly profitable. The range of mountains in which the gold-mines of Mampawa are situated extend also to the northward; gold and diamonds have been found in other parts of Borneo, and to all appearance are abundant; a frequency of commercial intercourse with the people, and the increase of wants that would arise from it, would no doubt lead to the usual course of civilisation, consumption, and demand. We know of nothing that should interrupt this ordinary progress; and even if it be not thought expedient to incur the immediate expense of forming an establishment, it must be prudent to interfere, lest other nations establish themselves to our exclusion. Let this be effected, and let the natives be encouraged by a free trade to their ports, it may be expected that the full advantage will result in due time.

The Eastern islands undoubtedly contain a very considerable mart for the sale of British manufactures. Broad cloths are highly prized by the natives, and the demand for them would augment in proportion to the means of purchasing. Some kinds of hardware manufactures would find a ready sale; iron is in demand, particularly the Swedish; and the experience of late years has shown that cotton cloths, manufactured in this country in imitation of Malay patterns, can be exported and sold below the local sale price of the native manufacture. This single fact is decisive of the importance and extent to which the Eastern trade might be carried and that it is a fact may be proved on reference to the results of the last year, when these cotton cloths have found a ready and advantageous sale, while the colonial markets have been otherwise so overstocked with European goods, that they scarcely have repaid the prime cost. In short, the practicability of extending

the demand for this species of manufacture' is bounded only by the means of access to the native population; and, as a general remark, applicable to almost every branch of European export, it may be observed, that as the inhabitants of the Indian islands are acknowledged to be free from those peculiar habits and prejudices which restrict the use of European luxuries among the Hindoo tribes, there is no reason why an increase of civilisation and wealth among them should not lead to an increased demand for the luxuries of civilised society.

Thus far the subject has been considered principally with reference to the extension of a direct trade from Europe; but there is still another branch of it that ought not to be overlooked, which is the commercial intercourse that has of late years been carried on between these islands and the possessions of the East India Company. By a report framed at Penang, it appears that 2,100 chests of opium were exported from that settlement in the year 1813-14 to different Eastern markets exclusive of China; and I have been informed that about 45 peculs of gold dust were received at Sambas and Pontiana, during the same year, on account of cargoes sold at those places. Notwithstanding, therefore, that the market will have become greatly contracted in consequence of the produce of the island of Java being no longer available as a return for the cargoes exported from British India to the Eastern islands, there might still be a valuable trade carried on with the independent native states; more especially when it is considered that this trade would lie near the ordinary track of ships proceeding from British India to Canton; and consequently the mercantile interests in India would be materially injured by any measure which tended to establish a monopoly of the trade of those islands.

The same course of argument is equally applicable with reference to the existing British trade at Canton. Edible birds'-nests, sea slug, and the various articles of less value which are also among the luxuries of the Chinese table, are the produce of the Indian islands, and find a ready sale in China; on the other hand, our woollen manufactures are in use throughout the Chinese empire, and are exported from thence to Japan; and I understand' · that the demand for our cotton goods has very rapidly and materially increased in China within these last few years, and promises to become even more productive.2 This fact leads to a

It is somewhat curious to trace the course of this trade. Raw cotton imported from Bengal and Bombay (where it is grown) is manufactured in Great Britain, and re-exported in its manufactured state to a sure market. It would be difficult to conceive a trade more beneficial to the mother country 2 Throughout its progress.

another proof of the importance of protecting and encouraging the course of the cotton manufacture, which has already been alluded

to.

conclusion, that by combining both sources of supply, by exporting British manufactures to the Indian market, and there collecting the local products which are sure of a ready sale in China, our domestic manufactures would find additional vend, and our trade to China would acquire importance in the estimation of the Chinese themselves, a point of no small consequence at any time, and especially now, when the Americans are making rapid strides, and threaten to acquire a superiority in the China trade. 9. It would hardly, perhaps, be believed that their progress was so considerable; but it is a serious fact, that in the last year 1817-18, the trade from America to China employed 7,000,000 dollars, and 16,000 tons of shipping, while, during the same period of time, the British trade to China occupied 6,500,000, dollars, and 20,000 tons of shipping; and consequently, allowing that the American merchant receives his return in the course of one year while the British requires nearly two years, the American trade to China is already more extensive than our own. Yet still, though the encroachments of the Americans are matter of daily complaint, though their means of future aggression go on increasing, and their present attitude denotes an indifference, if not something more than indifference, towards the opinion of this country, no means are taken to meet their progress, or to occupy those commercial resources which might enable us the better to compete with them.

Among the Indian islands, the native trade along the northern coast of Sumatra is exclusively in the hands of the Americans: the comparative cheapness with which the American merchants navigate their vessels, and the quickness with which they obtain their return-cargo (for the plain and obvious reason that they are not delayed by official forms, but each individual sells his goods as he can), enables them to give a higher price for colonial produce than the British merchant can afford to give. They usually purchase with specie, a circumstance which gives them a decided preference at Batavia or any other of the Dutch settlements to which they are allowed to resort, because the payment in specie is of considerable moment in the financial arrangements of the Java government. They also trade in small vessels, calculated to run with facility from port to port along the coasts of the independent native states; and from these collective causes they obtain an advantage which can only be met by affording corresponding facilities to the British merchant, in securing for him also a market among the Eastern islands, and permitting him to resort to that market freely and without reserve. In short, if the commercial resources of these islands be at all admitted to

be an auxiliary in the supply of the China market, every argument, whether drawn from domestic interest or foreign policy, seems to point out the advantage, not to say the necessity, of fostering the native industry of these islands, and obtaining a permanent connexion among them.

In the progress of this course of things also, a direct intercourse may possibly be established with Cochin China. The greatest obstacle to the success of former attempts has been found to arise from the influence which the French missionaries had obtained at that court; and, as many years have now elapsed since that period, probably a new succession of rulers will have pro duced new interests and views. The possibility may at any rate be adduced as a collateral argument in favor of an establishment near the China Sea; because the vicinity of such an establishment and the connexions dependant on it, would necessarily facilitate communication with Cochin China; and the known products of that country, as well as the particular advantages of its locality with reference to China, Borneo, and the Philippines, would guarantee an ample repayment of expense if the attempt proved successful.

The same observation, though in a less degree, may be applied to Japan; and it may not be uninteresting to give a concise history of the circumstances which have transpired from the commercial adventures sent to that country, in the years 1814 and 1815, from Batavia.

In the years 1813 and 1814 the local government of Jaya resolved to send a mission to Nangazacky, for the purpose of taking possession of the Dutch factory there, under the capitulation which stipulated for the surrender of the several dependencies of Java, and, at the same time, to take a proper opportunity of communicating to the Japanese government the annihilation of Holland as a separate and independent nation, the conquest of Java, and the willingness of the existing government to continue the commercial relations which had heretofore subsisted, and been annually carried on from Batavia. This, however, was required to be done with peculiar caution and delicacy, because it was known that an edict had been issued by the Japanese government some few years before, directing acts of reprisal against British ships, in consequence of their having taken offence at supplies having been obtained in a compulsatory manner by the commander of a ship cruising in that neighbourhood. There was nothing therefore in the appearance of the present adventure that should disclose at once its nature and object, the cargo was assorted agreeably to former usage, and the ships were

to enter the harbor of Nangazacky according to ancient forms, and under Dutch colors.

Upon the arrival of the commissioners the Dutch chief of the factory refused to consider himself bound by the capitulation of Java; and, by representing the danger that would result if he were to make known to the Japanese governor the real character of the expedition, induced the commissioners to agree that the commercial adventure should be carried through according to former usage, and without any political proceedings whatever. The commission therefore returned without having effected the main object of the voyage.

But the government at Batavia were by no means satisfied with this procedure; they considered the failure to have been mainly owing to the intrigue of the officers of the factory; and they were strengthened in this opinion by the following circumstance. It is customary that on the departure of the ships from Nangazacky for Batavia at the close of the annual consignment, a private signal is given to ensure the admission and friendly reception of the following year; and when, on the present occasion, this custom was renewed, the Japanese interpreters (who are the channel of communication between the factory and the governor of Nangazacky) secretly gave the commissioners a duplicate of the next year's signal, in order that no intrigue of the Dutch chief of the factory might prevent their return to Japan; intimating to them, at the same time, that the real character of the expedition was no secret.

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It was therefore determined to repeat the attempt in the year following;-but during this interval the situation of affairs had become changed by the arrival of intelligence of the results of the battle of Waterloo; and the further prosecution of the plan was abandoned, except that one ship was sent to Japan in the years 1814 and 1815, with a cargo which had been already prepared.

I shall conclude this part of the subject with some information, obtained from the persons employed on this occasion, and annex in an appendix an abstract of the results of consignments to Japan, in further illustration of it." emerseng do

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The Dutch trade from Batavia to Japan is regulated by specific agreement as to its extent and description. The export cargo from Batavia consists of sugar, woollens, piece goods, and small quantities of glass ware, spices, and ornamental fancy articles; in return for which, copper, camphor, silks, and lacquered ware, are received from the Japanese. The price of the merchandise is settled before the annual adventure commences; only a small sum of money is allowed to be brought to Japan, and

' Vide Appendix.

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