ABSTRACT
Penang was occupied by Captain Light, acting as the agent of the East India Company, in 1786, and named by him Prince of Wales Island. The government of Java was handed back to the Dutch in August 1816, and from then until the foundation of Singapore in 1819 Penang passed through what in retrospect seems to have been the most critical period in its history. The monopoly of the spice trade of the Moluccas which it secured to Holland raised hopes that the spice production of Singapore and Penang would be encouraged so as to free the British spice market from dependence on the Dutch. In August Singapore, which, although her revenues covered the cost of administration, the Bengal government found it inconvenient to control from Calcutta, was formally placed under the Government of Penang; and in November, much to the chagrin of the local government, they were forced to notify the suspension of customs duties at Penang.
