Just in case you were wondering what happened to Ali, rest assured that he flees the country after his defeat.
Back to the chat betwen Jim and the visiting Marlow. The two are talking about Doramin and his wife.
After the battle with Ali, Doramin is concerned about Jim's rise to power. He's worried that other white men may try to interfere on Patusan, because he wants his own son to be in charge. Doramin's wife, for one, is concerned about Jim's mysterious past. Uh oh. Could be trouble.
Marlow then tells us about Jewel, the stepdaughter of Cornelius (remember him, the man Jim replaced?). Jewel's father was white and her mother was the Dutch Malay woman that Stein was fond of (we heard about her in Chapter 21).
Apparently Jewel and Jim got pretty cozy; Marlow describes them as being domestic together.
Then he relates a funny incident where he encounters a white man who heard a "rumor" about an Englishman living in Patusan who had an enormous "jewel" (an emerald) in his possession. Could he be talking about Jewel and Jim? It looks like Jewel the person has turned into jewel the treasure, thanks to the rumor mill.