COLOMBO, Tuesday, January 21.

Ceylon was originally settled in 1517 by the Portuguese, who obtained the right to erect a small factory at Colombo for purposes of trade. This soon grew into a fort, and naturally the whole west coast became theirs. The Dutch drove them out a hundred and fifty years later, to be in turn expelled by the English after they had occupied the island for just about the same period. As with all their colonies, the Dutch left their impress upon Ceylon. New industries were introduced, great public works constructed, and, better than all, the education of the people was well cared for. The trade with Holland became a source of much profit. England has been master since 1796, nearly ninety years now, and certainly the work she has to show for the less than a century is marvellous indeed.

The people are not yet done rejoicing at the restoration of their ancient village institutions, which took place in 1871. Europeans had rudely swept these away and substituted courts after their own fashion. After many years trial, they were seen to be unsuited for the country, and the ancient village tribunals were reestablished, as I have said, a few years ago. It will not do to conclude, as many do, that India, Ceylon, and other of the Eastern lands, are left almost bare of just laws and fair administration, for nothing could be farther from the truth. The village elders, chosen by the people of Ceylon, for instance, administer laws which are the outgrowth of centuries, and as such are far better adapted to the real conditions which exist than any other system of laws, no matter how perfect, which have been found suitable in other lands under conditions wholly unlike. Here in this charming island, as indeed throughout all India, villages, or groups of villages, are authorized to frame rules having the force of laws, and which natives construe and administer.

I am amused at the ignorance of the average Englishman or American upon Eastern affairs. He is always amazed when I tell him that so far as representative institutions are concerned, there is not a village in India which is not farther advanced in this department of politics than any rural constituency in Britain. The American county, village, district and township system is of course more perfect than any other with which I am acquainted, but the English is really about the most backward. The experiment in Ceylon of restoring the native system has been an unequivocal success, even beyond the expectations of its warmest advocates, and in addition to the advantages flowing from the native courts, it is found that the village committees are beginning to repair and restore the ancient tanks and other irrigation works, which, under the curse of centralized and foreign authority had been allowed to fall into disuse.

The new blood of home rule in local affairs has aroused local patriotism and established numerous bodies throughout the country, each a centre from which good influences radiate, organizations into which good impulses flow, to crystallize into works of public utility, while at the same time an esprit de corps is created which must tell more and more. Wait till this plan is tried in England and Scotland, and, above all, in unhappy Ireland! I shall never despair of Ireland until at least a generation has had such local institutions as we find in Ceylon's Isle. If that people cannot develop under self-government, they deserve to fall away and give place to a better race; but they will not fail.

Caste exists in Ceylon, although it is not so strictly preserved as in India. Still, every calling is a caste, down to the scavenger. The several castes do not intermarry, nor is it practicable for one who has reaped great wealth and has natural tastes and abilities above his caste, to do in this small island what is readily done in India, viz., emigrate and set up in superior style in some other part of the crowded empire. The wealthiest native in Ceylon to-day is a fisherman, and yet he cannot gain admittance to the society of poorer natives about him of higher caste. If he were in India, and socially ambitious, he would change his residence. I was told by several Europeans that the bonds of caste in India are slowly weakening, and that when a wealthy stranger comes to a district it is held wise not to inquire too curiously concerning his birth.

Of all the castes, the tiller of the soil stands at the head in Ceylon; even the skilled worker in iron is away below him. The rural laborer with us must be taught to hold his head up. He is A1 in Ceylon.

The position held by Ceylon in ancient days as the great granary of Southern Asia explains the precedence accorded to agricultural pursuits. Under native rule the whole island was brought under irrigation by means of artificial lakes, constructed by dams across ravines, many of them of great extent - one, still existing, is twenty miles in circumference - but the system has been allowed to fall into decay. I am glad to know that government has resolved to undertake the work of repair. Proper sluices are to be supplied to all the village tanks, and the embankments are to be raised and strengthened through the labor of the village communities. We may yet live to see the fertility of the country restored to that of its pristine days.

We saw the new breakwater which government is constructing here at great expense. When finished it is proposed that the Indian steamers shall call here instead of at Galle, the harbor of which is dangerous. This may be a decided improvement upon the whole, but the tourist who does not see pretty Galle and enjoy the long day's drive through the island to Colombo will miss much.

Iron ore exists in Ceylon in vast deposits and is remarkably pure, rivalling the best Swedish grades. It has been worked from remote times, and native articles of iron are preferred even to-day to any that can be imported. If cost of transportation is to keep growing less and less, it is not beyond the range of possibility that some day Britain may import some of this unrivalled stone for special uses. There are also quicksilver mines, and lead, tin, and manganese are found to some extent.

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