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consists of two houses built for the officers of the Company, offices, a small lock-up surrounded by a stockade, and a few Chinese and Malay houses built on piles over the water.
Already a trade to some extent has sprung up-native boats bring, down the rivers of Borneo, principally from the Kinabatangan, which falls into the Sulu Sea to the eastward of the bay, jungle produce, consisting of gutta-percha, edible birds' nests, bees' wax, camphor, rattans, and, from the coast and islands in the Sulu Archipelago, tortoise-shell, seed pearls, mother of pearl shell, tripang, sharks' fins, &c., which they exchange with the Chinese merchants for cotton goods, brass wire, opium, tobacco, &c.
The value of the exports during the first half-year of 1881 is stated to have been 100,000 dollars, in the second half it was expected to be 50,000 dollars, while during the year the imports would probably amount to 100,000 dollars.
No agricultural operations have been undertaken, though the Company have commenced the formation of an experimental plantation for the growth of coffee, tea, cinchona, &c., up one of the rivers running into Sandakan Bay.
Indications of coal have been seen, but as yet no other minerals have been discovered.
There is also a good anchorage immediately outside the bay, between Bahala Island and the main- land, and it has been proposed to move the post to that island. There would appear, however, to be no great advantage in the change, and Mr. Treacher, the Company's chief representative (or Governor of Saba), having consulted me on the subject, I recommended him to keep the Settlement at Enlapora, where it is now.
The anchorage off that place is very good. There are no facilities for coaling at present, but the Resident at the place, Mr. Pryer, told me that, when the site of the Settlement was finally decided upon, it was in contemplation to erect stores for the coal which would have to be imported for the use of Her Majesty's ships on that part of the station.
But here as at Gaya Bay, the entrance to the harbour is too wide to admit of defence except by means of the heaviest ordnance.
The actual entrance to the harbour is nearly 6,000 yards in width-from the east point of Towsan Dooyan to the south of Bahala Island is 4,000 yards, and from the last-named place to the western side of the entrance is 1,600 yards.
Good positions may be obtained on the south point of Bahala Island, about 100 feet above the level of the sea, and also on the ground at Tanjong Papat 40 or 50 feet in height.
The site on the eastern side of the entrance is low and marshy, and far removed from the Settlement.
To fortify the place in present circumstances would be an undertaking too expensive and too large to be caried out.
To protect it against a single cruizer, a position for two or three 8-inch guns could be had on the knoll now occupied by the offices and prison.
But should at any time it ever become of importance to establish a naval station in this part of the world, the inlet marked "North Arm" at the head of the harbour, about 10 miles from the Settle. ment, is admirably formed by nature for defensive purposes.
The entrance to this bay is only 3,000 yards wide, and in the centre of the entrance is a small island large enough for the construction of a battery of from eight to ten guns.
The ground on the right shore rises to a considerable height, but convenient positions for batteries may be obtained on either side.
The inlet extends for a distance of upwards of 3 miles, with a breadth of over a mile, with from 7 to 10 fathoms.
On the north shore, where the water is deep pretty close in, at present there extends a large mangrove swamp, offering great difficulties to obtaining any clear space for buildings, &c., but which, no doubt, could and would be got over should the occasion warrant it.
At present nothing need be done, but as the orders are that a ship of war shall be continually in the Sulu Seas, making Sandakan its head quarters, the Company should be requested to erect wharves for the storage of coal, and to make arrangements for affording facilities for the coaling of Her Majesty's ships in the matter of lighters and labour.
USUKAN BAY.
I visited this bay, which is about 25 miles north of Gaya Bay.
It is an inlet of about 2 miles in depth, well sheltered in the north-east monsoon,
but exposed
to the full force of the south-west, though small vessels could find shelter from that wind at the extreme end of the bay.
I landed and walked across to Abai Bay, which lies a little to the north of it. This bay is exposed to the north-east, but sheltered from the south-west.
It would not be difficult to deny the use of Usukan Bay to an enemy by the construction of batteries on the island of that name, and on the high ground opposite.
Abai offers no advantageous positions for sea defence. The station of the Company here is, however, to be given up owing to no trade being possible there at present, and these harbours are not likely to be used for some years.
At Usukan (from Abai) and at Sandakan only was the "Lily" able to obtain supplies of fresh meat. At Abai there seemed to be a good stock of cattle, but at Sandakan there was only a herd of about twenty imported from the latter place.
No vegetables of any kind could be procured, nor, till the North Borneo Company have had time to induce the natives, and more especially Chinese, to settle down and cultivate the land in the neighbourhood of the various posts, will Her Majesty's ships visiting North Borneo be able to obtain any fresh provisions beyond meat, and that only in small quantities
Appendix No. 4,
NORTH BORNEO.
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