161 Prime Minister's Department to Mr S. M. Bruce, High Commissioner in London

Cablegram unnumbered 19 April 1940,

SECRET

My telegram 11th April TIMOR. [1]

Telegrams 246 and 251 from Stirling [2] confirm our view that Wittouck [3] seems a long way from acquiring any concession covering western area and that the Portuguese Government has in fact committed itself to promising a concession over this area to the Japanese.

That being so, emphasis is added to the view contained in last paragraph of telegram referred to.

We cannot but feel that mere oil concession will not exclude Japanese obtaining other and overriding concessions.

They are in fact already well established in Timor, mainly through activities of Sapt [4], and for these reasons we do not place the same importance on obtaining oil concessions over whole Territory as Foreign Office does.

That being so, we are inclined to view that if present discussions on basis my telegram are meeting grave difficulties it would be preferable for Oil Concessions to proceed with development of their own concession as rapidly as possible. To this end they might seek the assistance of Royal Dutch, assuming Anglo-Iranian are still disinclined to act. In this respect you might be in position to afford them valuable assistance by also enlisting co- operation of Netherlands Minister. [5]

It appears to us that Oil Concessions will need strong financial and technical backing preferably by a powerful Oil Company, as it seems doubtful whether they will be able to exploit from their own resources.

This view will be reinforced by fact that if proposal for Wittouck purchase cannot be consummated, Governments will not be called on for financial support, and Company will have to rely on outside assistance.

1 Document 137.

2 External Affairs Officer in London. The cablegrams are on file AA: A981, Timor (Portuguese) 22, v.

3 Managing Director of the Asia Investment Company.

4 Sociedade Agricola Patria e Travaryo.

5 Jonkheer E. Michiels van Verduynen.

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