o and the probability of the country becoming in the near
future a not unimportant outlet for English commerce, now so heavily
weighted by prohibitive tariffs in Europe and America.

The British North Borneo Provisional Association Limited, was formed in
1881, with a capital of L300,000, the Directors being Sir RUTHERFORD
ALCOCK, Mr. A. DENT, Mr. R. B. MARTIN, Admiral MAYNE, and Mr. W. H.
READ. The Association acquired from the original lessees the grants and
commissions from the Sultans, with the object of disposing of these
territories, lands and property to a Company to be incorporated by Royal
Charter. This Charter passed the Great Seal on the 1st November, 1881,
and constituted and incorporated the gentlemen above-mentioned as "The
British North Borneo Company."

The Provisional Association was dissolved, and the Chartered Company
started on its career in May, 1882. The nominal capital was two million
pounds, in L20 shares, but the number of shares issued, including 4,500
fully paid ones representing L90,000 to the vendors, was only 33,030,
equal to L660,600, but on 23,449 of these shares only L12 have so far
been called up. The actual cash, therefore, which the Company has had to
work with and to carry on the development of the country from the point
at which the original concessionaires and the Provisional Association
had left it, is, including some L1,000 received for shares forfeited,
about L384,000, and they have a right of call for L187,592 more. The
Charter gave official recognition to the concessions from the Native
Princes, conferred extensive powers on the Company as a corporate body,
provided for the just government of the natives and for the gradual
abolition of slavery, and reserved to the Crown the right of
disapproving of the person selected by the Company to be their Governor
in the East, and of controlling the Company's dealings with any Foreign
Power.

The Charter also authorised the Company to use a distinctive flag,
indicating the British character of the undertaking, and the one
adopted, following the example of the English Colonies, is the British
flag, "defaced," as it is termed, with the Company's badge--a lion. I
have little doubt that this selection of the British flag, in lieu of
the one originally made use of, had a considerable effect in imbuing the
natives with an idea of the stability and permanence of the Company's
Government.

Mr. DENT'S house flag was unknown to them before and