Early expedition Brunei could use the
Residential system, as suggested by
North Borneo's Governor Ernest Woodford Birch.
Sultan Hashim Jalilul Alam Aqamaddin's diplomatic efforts caused quite a stir since they irritated the
British government, which felt that Brunei had been treated with a lack of responsibility. He was then appointed assistant
consul in Brunei in October, having taken up an earlier position of assistant colonial secretary in April. Sincere in its intent, his report was critical of issues related to economic management as well as
judicial and
political administration. When he visited the areas of
Belait and
Tutong in 1904, he discovered that they were wealthier than he had anticipated. Following his
Report On Brunei in 1904 the
British government decided to maintain Brunei as a separate administrative entity. Whitehall praised the McArthur Report as "
by far the best that has ever been written", described it as "
excellent", and commended it as "
exhaustive and very useful". He also suggested the residential system for Brunei following a thorough examination of the circumstances. which were most noticeable in
Kampong Ayer, the water village where 8,000–10,000 people lived at the time the Residential system was implemented. Even though Kampong Ayer still had the sultan's palace, McArthur concentrated on establishing a colony on land, Free construction supplies were offered as a draw to entice Kampong Ayer residents to the new land settlement. His goals, however, were not fulfilled as only a small number of
Chinese settlers relocated in 1910, despite a severe threat from McArthur that the government would be compelled to impose penalties if the residents did not leave by the end of 1911. == Later life and death ==