Brunei from 1870 to 1888 was at a state of terminal decline. Territories were being wrestled away by Sarawak and the North Borneo Company, for example Brunei had lost the
Trusan river,
Padas Klias and
Lawas, whose annexation was acceded by the British Government. By 1885, the British Government was considering the partition of Brunei between the North Borneo Company and Sarawak. This view was in part due to Consul-General
Peter Leys' report on the River of Borneo. Leys proposed that the only territories to remain with the Sultan and his officers to be that of the
Brunei River and
Muara. Additionally, the British Government was anxious to prevent other colonial powers from establishing a strong foothold in Borneo, the most imminent threat being the Dutch who were present in the South of Borneo, as well as worries about German and French intervention following their growing colonial and commercial ambitions. In 1886, Colonial Secretary Granville supported a protectorate over Brunei, Sabah and Sarawak on the basis of Leys' recommendations. After further consultation the Colonial Office and the Foreign Office agreed on a plan for the Brunei question. It was agreed that Leys' partition formed the basis, with the establishment of political protectorates. A special commissioner was to be sent to observe the situation in the states. In 1887, Sultan Hashim appealed to the British Government not to allow more cessions of Brunei territory. This was because the final determinant of legality for territorial cession was under the jurisdiction of the British Government. This was established in Article 10 of the 1847 Treaty of Friendship and Commerce between Britain and Brunei. Accordingly, the British Government sent Sir
Fredrick Weld, the Governor of the Straits Settlements who was tasked to investigate and write a report on Brunei. Weld, unlike Leys before him was sympathetic to Sultan Hashim's position and recommended a protectorate system in the same style as the
Federated Malay states; along with a
British Resident to assist the Sultan in administration. Sultan Hashim was receptive to the idea of a protectorate but more hesitant to the Resident proposal. Nevertheless, the Sultan was ready to agree if it meant Brunei's survival as a state. The Colonial Office was not satisfied with Weld's suggestion and believed his insistence on a Resident and administrative protectorate financially impractical. Instead the Colonial Office opted for a simple protectorate and adopted Leys' original partition scheme. A Resident was not put in place as the Colonial Office believed that with the partitioning going ahead, a Resident would be unnecessary.
Lord Salisbury, the head of the Foreign Office had some reservations and noted that Sarawak and Sabah were "crushing out" Brunei and thought it would be best to not make any agreements that would "stand in the way of a consummation which is inevitable". Sir
Henry Holland, the secretary of the Colonial Office argued for the protectorate, pointing out that the plan would not interfere with the final absorption of Brunei. On 17 September 1888 after negotiations with Hugh Low, Sultan Hashim signed the British Protectorate Agreement. The partitioning of Brunei was not as extensive as Leys' proposal and the Sultan was able to keep the
Belait,
Tutong and
Temburong rivers along with the capital and Muara, with Limbang under nominal rule. Similar protectorate agreements were sent to Sarawak and North Borneo both of whom had signed it by 1888. In 1905, British Consul
Malcolm McArthur and the British Resident of
Negeri Sembilan Donald George Campbell were sent to re-negotiate the terms of the 1888 Treaty with Sultan Hashim. The new agreement was a blueprint for the early years for a Residency system in Brunei. Unlike the 1888 Treaty, the new agreement provided the British Resident with powers of administration and government. == Analysis and effect ==