The deficiencies in the Straits Settlements administration have become serious as Singapore has continued to grow, and Singapore's merchant community has begun agitating against British Indian rule.

The British government agrees to establish the Straits Settlements as a separate Crown Colony on April 1, 1867.

This new colony is ruled by a governor under the supervision of the Colonial Office in London.

An executive council and a legislative council assists the governor.

Although members of the councils are not elected, more representatives for the local population will gradually be included over the years.

Sir Harry Ord, whom the second Colonial Office appoints in 1867 as the Governor of the Straits Settlements, is at first given no instructions regarding the Colony's relations with the Malay States.

Ord is unpopular in the Straits Settlements, but is an ambitious and energetic man, who is ready to do what he can to restore order and promote trade in the Peninsula.

Conditions in Malaya at this time are extremely unsettled.

The quarrels of the Malays are intensified by feuds between competing groups of Chinese miners, and the links of the Chinese with the British settlements threaten to involve these too in the trouble.