Sandakan — Capital of British North Borneo and the City That Was Destroyed Twice

Why Sandakan replaced Kudat as capital in 1883

The BNCC moved its capital from Kudat to Sandakan in 1883 (Daily Express, checked 7 October 2026). Kudat had not developed as hoped. Sandakan, by contrast, had a large sheltered bay, access to timber and forest produce, and a position on regional sea routes.

Sandakan faces the Sulu Sea, a trade route linking North Borneo with Jolo and the wider region. This made it a practical trading centre and colonial capital.

More importantly, the forests surrounding Sandakan contained vast quantities of valuable timber—hardwoods that were in high demand in regional markets. Chinese merchants recognised this opportunity and began establishing logging camps and trading posts in the Sandakan region. By moving the capital to Sandakan, the BNCC placed itself close to this trade.

Sandakan became the administrative headquarters of British North Borneo (Borneo Post, checked 7 October 2026) and grew into its economic and political centre.

Sandakan under the BNCC — timber, trade, and growth

From 1883 onwards, Sandakan was the driving force of British North Borneo's economy and politics. The city grew rapidly as a trading centre and colonial capital, attracting merchants, traders, adventurers, and labourers from across Southeast Asia. Chinese merchants dominated commerce, establishing shops, trading houses, and logging operations. The waterfront bustled with activity: ships loading timber, trading goods changing hands, and sailors from multiple nations coming ashore.

The timber trade was the foundation of Sandakan's prosperity. Vast tracts of interior forest were logged, with timber transported downriver or overland to Sandakan, where it was processed and loaded onto ships for export. British, Chinese, and local entrepreneurs invested in logging camps and mills. This wealth flowed to merchants, to the BNCC government (through taxation and fees), and to the colonial economy more broadly.

Alongside timber, other commodities contributed to Sandakan's economy. Rubber was planted on estates in the surrounding region and exported. Copra (dried coconut), which was processed for oil and other products, was also significant. Tobacco cultivation was attempted. The BNCC government encouraged economic development and granted monopolies and concessions to merchants willing to invest in resource extraction and export.

The population of Sandakan grew dramatically. Chinese merchants and traders arrived in large numbers, establishing a vibrant merchant community that dominated commerce. Chinese coolies and labourers provided the workforce for logging, trading, and port operations. Bajau, Bugis, and other maritime peoples provided shipbuilding and seafaring expertise. A small European community of colonial officials, planters, and business people directed overall policy and controlled key monopolies.

The BNCC government established administrative offices, a resident's residence, military barracks, and public works in Sandakan. The city developed an urban character, with shops, warehouses, hotels, and residential areas. By the early 20th century, Sandakan was a busy, cosmopolitan trading port—rough at the edges, with gambling, vice, and frequent conflicts, but economically vibrant and politically significant.

The prosperity of Sandakan under the BNCC lasted until the Japanese invasion in January 1942. For nearly 60 years, the town was the centre of British North Borneo's government and commerce, a symbol of colonial rule and imperial expansion in Southeast Asia.

Agnes Keith and colonial life 1934-1952

Agnes Newton Keith, an American writer, married Harry Keith in 1934 and followed him to North Borneo, where he became Conservator of Forests (Online Archive of California, Keith papers, checked 7 October 2026). Her vivid accounts of colonial life in Sandakan provide one of the most detailed and engaging records we have of the BNCC period. Keith was an author and observer of extraordinary skill, documenting colonial society, indigenous cultures, the natural environment, and the dramatic upheaval of the Pacific War.

In her books, particularly "Land Below the Wind" (1939), Keith described the expatriate community of Sandakan: the tennis clubs, dinner parties, and social hierarchies of colonial society. She also wrote about the people of North Borneo and the natural environment.

When Japan invaded North Borneo in January 1942, Agnes Keith was in Sandakan. She and her young son were first sent to a camp on Berhala Island and then, in 1943, to a prison camp at Kuching (Online Archive of California, Keith papers, checked 7 October 2026). Conditions were harsh. Her account, "Three Came Home" (1947), was made into a film in 1950.

After the war ended in 1945, Keith was released. The family returned to North Borneo, and she wrote about the post-war years in "White Man Returns" (1951). After Harry Keith retired in 1964, the family moved to Canada.

The Agnes Keith House in Sandakan was rebuilt in 1946/47 as the first permanent government timber house after the war, and the Keiths lived there. Restored by the Sabah Museum, it opened as a museum on 26 April 2004 (Sabah Museum, checked 7 October 2026). Keith's legacy continues to inform how Sabahans and visitors understand the colonial period and World War II.

Sandakan Chinese community — the founding merchants

The Chinese merchant community was the economic foundation of Sandakan's prosperity. Chinese traders and merchants, operating from commercial networks that spanned the China Sea and Southeast Asian coast, recognised the opportunities offered by Sandakan's location and timber resources. They established trading houses, shops, and warehouses that funnelled goods (particularly timber) to regional and international markets.

The most successful Chinese merchants became towkays (business bosses) with networks of suppliers, labourers and trading partners, and dealt directly with BNCC officials. The Chinese merchant class created a vibrant commercial culture and contributed substantially to Sandakan's growth and cosmopolitanism.

Chinese also provided the labour force for logging, trading, and port operations. Chinese labourers arrived from China and elsewhere in the region seeking work, often in difficult conditions.

Over generations, Chinese families established themselves in Sandakan, marrying locally, adopting Sabah as home, and creating hybrid Sino-Sabah communities. Chinese temples, schools, and associations were established, creating institutional structures that preserved Chinese culture while adapting to the Sabah context. By the mid-20th century, the Chinese community was integral to Sandakan's identity.

During the Japanese occupation, many Chinese residents suffered violence, internment or forced labour. These experiences left deep scars.

WWII and the Sandakan Death Marches

A Japanese force arrived at Sandakan on 19 January 1942, and the Governor surrendered North Borneo that day (Percival despatch, London Gazette, checked 7 October 2026). In July 1942 about 1,500 Australian prisoners of war (B Force) disembarked at Sandakan (Australian War Memorial, checked 7 October 2026), and the prisoners were made to build an airstrip (DVA Anzac Portal, checked 7 October 2026).

The Japanese military required vast quantities of labour for construction, mining, logging, and supply operations. Some 2,500 Australian and British prisoners of war, sent from Singapore, and local labourers were forced to work under brutal conditions. Many died from disease, malnutrition, overwork, and brutality.

As Allied forces advanced in the Pacific in 1944-1945, the Japanese military became increasingly desperate and paranoid. They feared that POWs might be liberated and join Allied forces. In an effort to prevent this, the Japanese ordered the evacuation and forced march of POWs from Sandakan inland, supposedly to move them to a more secure location. What followed were the notorious Sandakan Death Marches.

The first forced march to Ranau, about 255 km inland, began in January 1945 and the second in May 1945 (DVA Anzac Portal, checked 7 October 2026). Prisoners marched without adequate food, water or medical care, and those left at Sandakan also died. Of about 2,500 Australian and British prisoners, only six Australians survived (Australian War Memorial, checked 7 October 2026), all of them escapees.

The Sandakan Death Marches represent one of the Pacific War's most tragic episodes. They are commemorated in memorials throughout Sabah and Australia. Sandakan Memorial Park, on the site of the former POW camp, honours the victims (Australian Department of Veterans' Affairs, checked 7 October 2026) and serves as a site of remembrance for Australians and international visitors. The marches remain a symbol of the brutality of the Japanese occupation and the sacrifices made during the Pacific War.

Allied bombing and destruction 1944-1945

As Allied forces advanced towards Borneo in late 1944 and 1945, Sandakan, with its port and airstrip, became a target for air raids.

Much of the pre-war town was destroyed or severely damaged. Accounts of St Michael and All Angels Church differ: Borneo Post reports it was bombed and lost its wooden roof and interior fittings while its stone walls stood (Borneo Post, checked 7 October 2026), while Sabah Tourism says it avoided major damage (Sabah Tourism, checked 7 October 2026). The Keiths' pre-war house was also lost, and a new one was built in 1946/47 (Sabah Museum, checked 7 October 2026).

By the time the war ended in August 1945, the colonial capital lay largely in ruins and had to be rebuilt.

Capital moved to Jesselton in 1946

After the war ended, the British returned to North Borneo. North Borneo became a Crown Colony on 15 July 1946 (Borneo Post, checked 7 October 2026), and Jesselton (now Kota Kinabalu) on the west coast was made the capital in 1946 (Penang Monthly, checked 7 October 2026).

Jesselton, re-established on its present site in 1899, was smaller than Sandakan before the war and was itself razed by wartime bombing, yet it was chosen in 1946 as the new capital (Britannica, checked 7 October 2026).

Sandakan, though remaining important as a port and district centre, was relegated to secondary status. The city would gradually rebuild, but never regained its pre-war prominence as the political and economic centre of British North Borneo. When North Borneo achieved self-government on 31 August 1963 and joined Malaysia on 16 September 1963 (Borneo Post, checked 7 October 2026), the capital was Jesselton, not Sandakan.

Sandakan today

Modern Sandakan is one of Sabah's largest towns and the main centre of the east coast. It remains an important port and economic centre, though its role is now secondary to Kota Kinabalu. The economy is based on fishing, palm oil processing, timber milling (though at much reduced scales from the colonial era), and increasingly on tourism and trade.

The town has been largely rebuilt since the war. Very little pre-war architecture remains in the centre. The Sam Sing Kung temple, completed in 1887, still stands (The Vibes, checked 7 October 2026). The Agnes Keith House is a post-war rebuild (1946/47), and the overwhelming majority of modern Sandakan is post-war construction. This is why Sandakan, unlike some other Asian colonial cities, lacks the visual continuity with its colonial past.

However, Sandakan remains deeply conscious of its history. Sandakan Memorial Park, on the site of the former POW camp, is a significant site of remembrance. Museums and cultural institutions preserve accounts of the colonial period and the Pacific War. The Agnes Keith House has been restored and is now a museum drawing visitors interested in colonial history and WWII. Educational institutions teach local history, ensuring that young Sabahans understand their city's significant place in regional and world history.

Sandakan is the gateway to the Kinabatangan River, one of Sabah's primary wildlife areas with wildlife lodges and river cruises, and to Sepilok. Visitors to Sandakan often use the city as a base for accessing Kinabatangan and other natural attractions.

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