obnoxious, and almost without exception the colonies they founded
became prosperous and well-governed only when they had escaped from
their yoke. The existence of such companies today is justified--if at
all--only by certain political and economic reasons. It may be
desirable for a government to occupy a certain territory, but political
exigencies at home may not permit it to incur the expense, or
international relations may make such an adventure inexpedient at the
time. In such circumstances, the formation of a chartered company to
take over the desired territory may be the easiest way out of the
difficulty. But it has been demonstrated again and again that a
chartered company can never be anything but a transition stage of
colonization and that sooner or later the home government must take
over its powers and privileges.

The story of the rise of the British North Borneo Company provides an
illuminating insight into the methods by which that Empire On Which the
Sun Never Sets has acquired many of its far-flung possessions. Though
the British had established trading posts in northern Borneo as early
as 1759, and had obtained the cession of the whole northeastern
promontory from the Sultan of Sulu, who was its suzerain, the hostility
of the natives, who resented their transfer to alien rule, was so
pronounced that the treaty soon became virtually a dead letter and by
the end of the century British influence in Borneo was to all intents
and purposes at an end. Nor was it resumed until 1838, when an
adventurous Englishman, James Brooke, landed at Kuching and eventually
made himself the "White Rajah" of Sarawak. In 1848 the island of
Labuan, off the northwestern coast of Borneo, was occupied by the
British as a crown colony and some years later the Labuan Trading
Company established a trading post at Sandakan. In an attempt to open
up the country and to start plantations the company imported a
considerable number of Chinese laborers, but it did not prosper and its
financial affairs steadily went from bad to worse. As long as the
company kept its representative in Sandakan supplied with funds he
managed to maintain a certain authority among the natives. But one day
he received a letter bearing the London postmark from the company's
chairman. It read:

"Sir: We are sorry to inform you that we cannot send you further
funds, but you should not let this prevent you from keeping up
your dignity."

To which the