Unbeknownst to the Sultan, Light had acted without the approval of the East India Company when he promised military protection. When the Company failed to aid Kedah when it was attacked by Thai, the Sultan tried to retake the island in 1790. The attempt was unsuccessful, and the Sultan was forced to cede the island to the Company for an honorarium of 6,000 Spanish dollars per annum. This was later increased to 10,000 dollars, with Province Wellesley (Seberang Prai) being added to Penang in 1800. An annual honorarium of 18,800 ringgit continues to be paid by the Penang State Government to the Sultan of Kedah.
The settlement was first built around the harbour with Fort Cornwallis forming the island's defence. Light became the first Superintendent of the Prince of Wales Island. To expedite jungle clearing by labourers, Light fired silver coins from his ship cannons into the dense vegetation, and the land was cleared in no time. The original four streets of George Town were Beach Street, Light Street, Pitt Street (now Masjid Kapitan Keling Street) and Chulia Street, all of which still form the main thoroughfares of the modern city. Other early roads include Church Street, Bishop Street, China Street and Market Street, and by the early 1800s also Armenian Street and Acheen Street.
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| Fort Cornwallis in George Town, British outpost |
Light declared Prince of Wales Island a free port to attract trade away from the Dutch who were then the colonial ruler of the Dutch East Indies. This strategy drew many immigrant traders to Penang. Settlers were allowed to claim whatever land they could clear. By 1789, Penang had 5,000 residents and this doubled by the end of the following decade. The first Chinese settlers in Penang came from an existing community in Kedah, with their leader, called a Kapitan Cina, being Koh Lay Huan, a Baba.
In the history of Penang, Light died of malaria on 21 October 1794 and was buried at the Protestant cemetery at the end of Northam Road (now Jalan Sultan Ahmad Shah). His son, William Light went on to found the city of Adelaide in Australia. Lieutenant-Colonel Arthur Wellesley (the future Duke of Wellington) arrived in Penang to coordinate the island's defences. In 1800, Lieutenant-Governor Sir George Leith secured a strip of land across the channel from the island and named it Province Wellesley, after Richard Colley Wellesley, 1st Marquess Wellesley, Governor-General of India.
Early in the 19th century, Penang was used as a staging post for the opium trade between India and China. The East India Company auctioned off licences to gambling dens, brothels and opium traders (this alone accounted for approximately 60% of colonial Penang's
In 1805, Penang's colonial status was elevated to that of a Residency. Stamford Raffles arrived in Penang to work as the Deputy Secretary to the Governor of Penang, Philip Dundas from 1805 to 1810 and subsequently founded Singapore in 1819.
(courtesy of wikipedia.org)
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