10 BRITISH BORNEO. 
The first English connection with Borneo was in 1609, 
when trade was opened with Sukadana, diamonds being said 
to form the prineipal portion of it. 
The East India Company, in 1702, established a Factory at 
Banjermassin, on the South Coast, but were expelled by the 
natives in 1706. Their rivals, the Dutch, also established 
Trading Stations on the South and South-West Coasts. 
In 1761, the East India Company concluded a treaty with 
the Sultan of Sulu, and in the following year an English Fleet, 
under Admiral DRAKE and Sir WILLIAM DRAPER captured 
Manila, the capital of the Spanish Colony of the Philippines. 
They found in confinement there a Sultan of Sulu who, in 
gratitude for his release, ceded to the Company, on the 12th 
September, 1762, the island of Balambangan, and in January 
of the following year Mr. DALRYMPLE was deputed to take 
possession of it and hoist the British flag. Towards the 
close of 1763, the Sultan of Sulu added to his cession the 
northern portion of Borneo and the southern half of Palawan, 
together with all the intermediate islands. Against all these 
cessions the Spanish entered their protest, as they claimed 
the suzerainty over the Sulu Archipelago and the Sulu Depend- 
encies in Borneo and the islands. This claim the Spaniards 
always persisted in, until, on the 7th March, 1885, a Protocol 
was entered into by England and Germany and Spain, whereby 
Spanish supremacy over the Sulu Archipelago was recognised 
on condition of their abandoning all claim to the portions of 
Northern Borneo which are now included in the British 
North Borneo Company’s concessions. 
In November, 1768, the Court of Directors in London, 
with the approval of Her Majesty’s Ministers, who promised 
to afford protection to the new Colony, issued orders to the 
authorities at Bombay for the establishment of a settlement 
at Balambangan with the intention of diverting to it the China 
trade, of drawing to it the produce of the adjoining countries, 
and of opening a port for the introduction of spices, etc. by 
the Bugis, and for the sale of Indian commodities. The actual 
date of the foundation of the settlement is not known, but 
Mr. F. C. DANVERS states that in 1771 the Court ordered that 
