The Dutch were very angry with Raffles. The British had returned Malacca to the Dutch in 1818 instead of 1816. The Dutch were thus not pleased. They had also been worried and angry when Raffles tried to bring more land in Sumatra under British rule. The Dutch therefore objected violently to Raffles’ founding of Singapore.

The Dutch Governor-General at Batavia, Baron van dear Capellan. Claimed that Singapore was under their influence. He demanded that the British withdraw from Singapore. He also threatened to use force to drive them out. Meanwhile Colonel Bannerman was angry with Raffles too. He was unwilling to accept Raffles’ founding of Singapore. He wanted the Company to give it up. This was because he was jealous of Raffles’ influence and success. He also did not want to have a rival pot for Penang.

The British authorities in London and Calcutta were also angry with Raffles. He had placed them in a difficult position with the Dutch government. At that time, Britain needed the Netherlands as an ally in Europe, because a strong enemy could use the Netherlands as a base fro attacking Britain. The British government therefore did not want to lose the friendship of teh Dutch. Neither did the Netherlands want to fight against teh BRitish. Thus, Britain and the Netherlands decided to settle their rivalry and quarrels in the East peacefully.

During the next five years a “paper war” over Singapore was carried on between London, The Hague, Calcutta, Batavia, Penang and Malacca. Van dear Capellan thought that his protests and threats would make the British leave Singapore. But hey did not. Lord Hastings who had earlier rebuked Raffles, decided to support Raffles. He and the Dutch finally agreed to carry our the decision made by London and The Hague. Lord Hastings and then ordered Bannerman to send troops to protect Singapore for time being. While the British and the Dutch were trying to come to an agreement over Singapore, teh new settlement was prospering rapidly. The British soon became unwilling to give it up.

Meanwhile, Raffles made another treaty with Sultan Hussein and the Temenggong in 1823. They gave up any and all rights to control over the trade of Singapore to the British. In return, the British would give the Sultan a monthly pension of $1,500 and the Temenggong, $800

Even as these events were going on, the British authorities realised the importance of holding on tightly to Singapore. It had been a profitable port-of-call for their China trade. The Company was finally able to get a share of the trade in teh East Indies thanks to it. Moreover, teh Dutch could no prove that Singapore belonged to them. The British authorities then decided not to give up Singapore. It was feared that a war would break out between them, an outcome that neither side really desired.

Finally on 17th March 1824, Britain and the Netherlands decided to end their rivalry in teh East and strengthen their friendship in Europe. As an affirmation of this, they signed the Anglo-Dutch Treaty.