Raffles divided the British town into sections - government and public use, business and residential. The north bank of the Singapore River was reserved for government and public use. The south bank was turned into business area. The area of the hill on the south bank of Singapore River was developed into a Commercial Square in wherein both Asian and European merchants could trade and live. Under his plan ethical subdivision was also organized and a network of roads was built.

On 7 June 1823, the second treaty singed by Raffles with the Sultanate and the Temenggong, the agreement brought the island under the British law with the provision that it would take account Malay customs, tradition and religion. The new Resident John Crawfurd, who replaced Farquhar carried out the plan of laid by Raffles.

Strait Settlement

The Dutch government protested the establishment of the new settlement by the British based on the argument that Sultan Abdul Rahman was the rightful Sultan of Johor-Riau Sutltanate and not Tenaka Hussein whom Raffles signed the treaty with.

This dispute was solved when the Anglo-Dutch Treaty of 1824 was signed between the British and the Dutch. Among the terms of the treaty, was the division of Malay Archipelago into two colonial powers- Malacca, Penang and Singapore falling under British sphere of influence which will be under British control and the Dutch sphere of influence.

Having solved the problem with the Dutch, the East India Company (EIC) concluded another treaty with the Sultan Hussein and the Temanggong. Based on the treaty the entire island of Singapore was handed over to the EIC in return for more cash payments and pensions.

Singapore become the centre of government for the three areas and grew to become an important port in the region. The opening of the Suez Canal in 1869 boost trade in Singapore and became a major port of call for ships plying between Europe and East Asia. At the end of 19th century, Singapore was experiencing exceptional prosperity and trade expanded eightfold between 1873 and 1913. The affluence attracted immigrants from areas around the region. Chinese became the largest ethnic group in Singapore, followed by Malays who worked as fishermen, craftsmen or as wage earners. By 1860, the Indians became the second largest ethnic group in Singapore consisting of unskilled labourers, traders and convicts who were sent to carry out public work projects.

Despite the prosperity of the country, the administration governing the island was understaffed, incompetent and was unconcerned with the welfare of the public.

Singapore’s peace and prosperity ended in the early morning of 15 February 1942 when the Japanese bombs rained down on the island.

Japanese Occupation

The occupation of Japanese in Singapore was like a long nightmare that lasted for three years and half. During the occupation the Japanese gave Singapore a new name "Syonan-to" which means the light of the South. However the light did not shine brightly to the people of Singapore. People suffered and lived in constant fear of Japanese.