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British North Borneo

British North Borneo, a Crown colony on Borneo, was established in 1946 after the end of the British Military Administration. It became the state of Sabah after joining the Federation of Malaysia in 1963.

In the late 18th century, Britain gained interest in Malaya and northern Borneo for trade. They acquired Penang in 1786 and Singapore in 1819, which became a major trading hub with a mainly Chinese population. Malacca was obtained from the Dutch in 1824, and the three ports collectively called the Straits Settlements were governed by the British.  

In the early 1700s, Brunei ceded its claims over Northeastern Borneo to the sultan of Sulu. In 1872, the British in northeastern Borneo launched the British North Borneo Company, which ruled the British protectorate until 1941. The company established the economic, administrative, and political framework of contemporary Sabah, despite only moderate prosperity due to high overhead and poor management. 

North Borneo's main industries were tobacco, logging, and hardwood exports from the 18th century, with rubber cultivation expanding from the 1900s. The North Borneo Railway Line facilitated resource transportation to the west coast port. In 1915, Japanese emigrants were invited to participate in economic activities, mainly rice cultivation. They purchased a rubber estate owned by the government and, by 1937, timber exports surpassed Siam. Privately owned Japanese estates and companies were involved in the economy. Japanese migration to Tawau and Kunak increased with growing investment. They also opened the land for agriculture. 

Initially, the colony used the Mexican dollar as its monetary unit. It was subdivided into 100 cents and matched to the Straits dollar. Banknotes issued during company administration bear a background of Mount Kinabalu or the company emblem.

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