f advantage in having a
tide-way passing under the houses. I should add that Sandakan is a
creation of the Company's and not a native town taken over by them. When
Mr. PRYER first hoisted his flag, there was only one solitary Chinaman
and no Europeans in the harbour, though at one time, during the Spanish
blockade of Sulu, a Singapore firm had established a trading station,
known as "Kampong German," using it as their head-quarters from which to
run the blockade of Sulu, which they successfully did for some
considerable time, to their no small gain and advantage. The success
attending the Germans' venture excited the emulation of the Chinese
traders of Labuan, who found their valuable Sulu trade cut off and,
through the good offices of the Government of the Colony, they were
enabled to charter the Sultan of Brunai's smart little yacht the
_Sultana_, and engaging the services as Captain of an ex-member of the
Labuan Legislative Council, they endeavoured to enact the roll of
blockade runner. After a trip or two, however, the _Sultana_ was taken
by the Spaniards, snugly at anchor in a Sulu harbour, the Captain and
Crew having time to make their escape. As she was not under the British
flag, the poor Sultan could obtain no redress, although the blockade was
not recognised as effective by the European Powers and English and
German vessels, similarly seized, had been restored to their owners. The
_Sultana_ proved a convenient despatch boat for the Spanish authorities.
The Sultan of Sulu to prove his friendship to the Labuan traders, had an
unfortunate man cut to pieces with krisses, on the charge of having
betrayed the vessel's position to the blockading cruisers.

Sandakan is one of the few places in Borneo which has been opened and
settled without much fever and sickness ensuing, and this was due
chiefly to the soil being poor and sandy and to there being an abundance
of good, fresh, spring water. It may be stated, as a general rule, that
the richer the soil the more deadly will be the fever the pioneers will
have to encounter when the primeval jungle is first felled and the sun's
rays admitted to the virgin soil.

Sandakan is the principal trading station in the Company's territory,
but with Hongkong only 1,200 miles distant in one direction, Manila 600
miles in another, and Singapore 1,000 miles in a third, North Borneo can
never become an emporium for the trade of the surrounding countries and
islands, and the Court of