to be seen. In other parts of the peninsula, the old arts and crafts have shown a regrettable tendency to flag with the advance of European influence; and it is possible that the experience will be repeated on the east coast. But the peculiar skill which marks the Trengganu worker will doubtless find its opening in some profitable way, either in association with a purely local enterprise or in the larger life of the peninsula which the construction of the railway will open up. It is not, at all events, an altogether visionary idea that some day, not long hence, 'the Birmingham of the Peninsula,' as Kuala Trengganu has been called, may develope an important manufacturing industry on Western lines, as Bombay and other Eastern cities have done.

In addition to the States which have recently come under the ægis of British influence, there is the considerable State of Johore lying at the extreme south of the Malay Peninsula, in close contact at its southern end with Singapore, with which it is historically connected. Johore has occupied a position of considerable political importance from the earliest period of British rule; and until recently it stood somewhat aloof from the current of commercial life which in the adjoining federated territory was producing such remarkable results. But the last few years have wrought a considerable change in the aspect of affairs. Rubber development has found a natural outlet in the vast expanses of almost virgin soil of which the State consists. Great tracts of land have been taken up and planted with Para rubber by Japanese as well as European planters; and a large immigrant population has sprung up in the coastal districts, with marked advantage to the revenue of the State. Commercial interests generally have undergone notable expansion in sympathy with the extension of rubber cultivation. Johore, in fact, seems at last to have awakened to its destiny as commercially the most important of all the States in the Malay Peninsula. But, with all its recent progress, it is still only on the threshold of its career as a modernised State. So little is the country known, although it lies at the very doors of Singapore, that until a few years ago, when the need was supplied, no trustworthy map of the territory existed.

p

road-construction, now in process a completed, materially promote State. By means of this arterial will be established with the Coasts; and the capital will be Towns which are at present only

The completion of the East ot be without its invigorating y, for an important section of this s of the Johore State Railway, ne F.M.S. Railway Department, to the Federated Malay States in policy of unifying the adminisvays in British Malaya. Seeted States have been under yashort time, they are already proved administration the marked

influences that have been introe revenue has grown from $402,638 1916; and the trade of the State, e was quite small, now reaches the $500,000. In Kelantan and Trengas been slower, partly owing to local ce leaven of civilisation is neverworking, and in due time will proinancial results observable in the Core, though standing apart from

Protected States, is advancing in novement which is influencing them. reased from about $2,000,000 in 1909 910 to $7,976,862 in 1916; and its

in a remarkable way in the past > the exports and imports amounted 294 as compared with $25,228,184 in The exports have more than doubled ly owing to the greatly increased value of the rubber and tin shipped.

Ipin of the State has increased tenfold in og the last year covered by the report

han head. This extraordinary development

take recent discovery of extremely rich the valuable metal in an isolated district

From one mine alone in this locality

tin of the value of one and a half million dollars was extracted in seven months of 1915. These are striking facts. But to see the marvellous effect of British influence at its highest point we must go to the older federated area. Pahang, which is the youngest State in the federation-it joined in 1888-enjoys nearly four times the revenue it did ten years since, and if we carry the record back another ten years we find that the income of the State has increased fifteen-fold-from $100,220 in 1894 to $1,871,297 in 1916.

The position of the States as a whole is one of extraordinary financial progress. So late as 1880, the collective revenue of the States then comprising the Federation was only $881,910; in 1916 it was $51,121,856 against $40,774,984 in 1915, and contrasting strikingly with the pre-war return of 1913, during which year revenue of the then record sum of $44,332,711 was collected. It has to be admitted that the expenditure has more than kept pace with the Federation's income. The following figures, indeed, at the first glance are a little disquieting:

1912.

1913.

1914.

1915.

1916.

$30,990,487 $47,287,581 $55,010,037 $42,838,631 $31,966,581

Here we have revealed a considerable increase in the expenditure of the years 1912-15. The explanation is a simple one. The Federation in the last few years has enormously increased its reproductive expenditure-outlay on railways, roads, etc.; it has financed a loan to Siam; and large contributions in respect of the battleship H.M.S. 'Malaya,' the splendid gift of the Malayan princes to the Navy, figure in the last three years' returns. The financing of public works out of revenue is a sound policy; and in this respect British Malaya occupies a unique position amongst the countries of the Empire, for she has no public debt, and, apart from accumulated funds amounting to $60,631,511 (7,073,6767.), owns a railway system, on which $92,560,398 (10,798,7331.) have been expended down to the end of 1916, and which bring in a return of 4.92 per cent. on capital. It should be explained, however, that during April of 1916 a local loan of $15,000,000 was raised for the purpose of assisting the Imperial War Fund, it having been urged that the

wealthy native classes might be given an opportunity of showing their patriotism. The loan was over-subscribed; and one prominent Chinese resident, the late Towkay Loke Yew, C.M.G., contributed over one million dollars (about 120,000l.).

If we leave out of consideration the falling-off of revenue in 1914 and 1915, which is accounted for to a large extent by the derangement of trade owing to the war, the expansion of the resources of the Federation has been progressive almost from the beginning. Since 1888 the revenue has increased tenfold and the imports and exports more than fivefold, while the population has grown from 424,218 in 1891 to 1,172,336 in 1915.

Taking a wider survey, embracing the whole of the Malayan area under British influence-the 'old Colony' as well as the Federated States-we have a remarkable position disclosed in the trade returns. The following are the latest figures relative to Imports and Exports in connexion with the Straits Settlements:

It is noteworthy that the aggregate trade of British Malaya in 1916 (164,244,2037.) was in excess of the total seaborne trade of India twenty years ago. That the astonishing progress already made will be maintained at the rate that the past has witnessed is perhaps not to be expected. But we may reasonably hope that there will be a steady growth in the commerce of the area. The remarkable wealth of British Malaya in raw material

* Fluctuation in price of rubber and tin affects value of exports.

indispensable to the world's manufactures must insure for its trade an increasing predominance. For its rubber,* its tin, its wolfram and other valuable mineral deposits, and for its copra, it has an assured market; and with the opening-up of the Peninsula by railways and roads these natural resources will be indefinitely multiplied.

One of the most encouraging facts of the war period is the relatively small effect that the cataclysm in Europe has had on our tropical possessions. In the first months of the war there was a temporary dislocation of trade relations, due partly to raiding enemy cruisers and partly to the natural timidity of the community in the presence of such exceptional conditions as those which the war brought about. But this wave of depression soon passed away; and to-day the position is quite satisfactory, save in a few special directions in which commerce is directly affected by the stoppage of trading with the enemy countries. As regards British Malaya, the outlook has never been brighter. Trade, as the figures cited show, not only recovered from the first effects of the war, but there was actually an improvement on the pre-war conditions, the returns for the Straits Settlements disclosing an increase in 1916 of 29,692,3641. over the excellent figures of 1913, and of 44,108,6747. over those of 1914. A further interesting point to be noted is that the exports from the Federated Malay States in 1915 formed a 'record.' This record in its turn was eclipsed by the figures for 1916. The phenomenon is largely explained by the enhanced price of rubber and the increased export of that invaluable commodity. Though in this instance the war's influence has been directly beneficial and the return of peace may produce a reaction, the remarkable fact remains that, in the second and third year of the

* Hevea brasiliensis, a South American tree of the order Euphorbiaceæ. A few plants of this tree were sent out from the Royal Gardens, Kew, in 1876, and were in the same year planted in the Singapore Botanic Gardens and also in the grounds behind the Residency at Kuala Kangsar, Perak. The seeds from these locally grown trees were distributed to various places in the neighbourhood, and ultimately plantations were formed which became the nucleus of the vast rubber industry in British Malaya. Last year's output from the Federated Malay States alone amounted to 62,764 tons, with an approximate value of 17 million pounds sterling. The Malay Peninsula produces about two-thirds of the total of the world's production of plantation rubber.