9 Mr A. T. Stirling, External Affairs Officer in London, to Department of External Affairs

Cablegram 22 LONDON, 9 January 1940

MOST SECRET

TIMOR

My H524 [1] and telegrams Nos. 616 [2] and 3. [3] Further

information now available from 'secret but entirely trustworthy

source' referred to in previous telegrams.

(1) In a telegram to the Japanese Minister at Lisbon [4] on 24th

November the Japanese Minister for Foreign Affairs [5] referred to

Japan's desire to proceed in due course to develop Timor's oil

resources and urged him 'to bear in mind the great importance of

the question in relation realization our national [fuel] [6]

supply scheme and also as an offset to the American "stringent

embargo" against Japan'.

(2) On 4th December the Japanese Minister at Lisbon reported to

the Minister for Foreign Affairs that 'it will be quite impossible

for us to gain our desired objectives by means of ordinary

negotiations. Judging from Portugal's treatment of Belgian

interests and from unjust suspicions that Bitoque's (presumably

Wittouck [7]) activities with a view to getting oil rights are

being carried out in co-operation with Japan, there is reason to

suspect that Portuguese have decided definitely not to grant such

concessions to Japan'.

(3) On 21st December the Japanese Minister for Foreign Affairs

telegraphed to the Minister at Lisbon: 'We consider that we must

make use of Macao to break this deadlock', instancing the cutting

of land and water communication in order to induce an acute food

shortage, or occupation of the coast opposite Macao. Pointing out

that he wanted to attain his objective if possible without

resorting to such pressure he authorized the Minister 'to make

dear our demands and, if they persist in refusing to reconsider

the matter, to hint in a roundabout way at pressure'. He added:

'It is quite possible that as you say the machinations of Great

Britain are behind this business so it may be necessary to

negotiate with Great Britain too, depending on how the matter

develops'.

(4) On 22nd December the Japanese Minister at Lisbon reported home

that Australian contract was now as good as settled. He asked the

Minister for Foreign Affairs: 'Do your instructions mean that you

intend to dispute the monopoly of the Australian company over the

area in which they have the concession?' i.e. east of longitude

125 degrees 50 minutes east. He pointed out that 'an early

withdrawal of the Australian monopoly is link[ed] up with

closeness of relations which bind the Portuguese Government with

British'. He urged that Japan should try to acquire rights in the

district west longitude mentioned above comprising roughly one-

third of Portuguese Timor and having established a footing bide

her time until a proper opportunity presented itself.

(5) On 30th December the Japanese Minister for Foreign Affairs

replied:

'Although we should be satisfied if Sapt's [8] entry into the

field were permitted, what I believed to be essential was that the

monopoly itself should be disputed and that Portuguese should be

made to be to [sic] first to suggest a definite scheme for a

compromise. If we endeavoured to acquire concession for the

western territory that would be tantamount to overlooking for the

time being fact of other party being in possession and I would

therefore prefer not to make such a proposal as yet'.

(With regard to the proposed pressure on Macao you will remember

similar reports to this effect early in 1939.)

1 On file AA: A981, Timor (Portuguese) 22, iv.

2 This is an incorrect reference to cablegram 716. See Documents

on Australian Foreign Policy 1937-49, vol. II, Document 417.

3 Document 1.

4 Kikuji Yonezawa.

5 Admiral Kichisaburo, Nomura.

6 This word has been inserted from Stirling's file copy on AA:

A2937, Timor Oil.

7 S. F. Wittouck, Managing Director of the Asia Investment

Company.

8 Sociedade Agricola Patria e Travaryo.

[AA: A981, TIMOR (PORTUGUESE) 22, iv]