200 Mr S. M. Bruce, High Commissioner in London, to Mr R. G. Menzies, Prime Minister

Cablegram [294] [1] LONDON, 1 May 1940, 10 p.m.

FOR PRIME MINISTER SECRET

Timor.

Your telegrams of 11th, 19th and 27th April. [2] Had further long discussion with Cadman [3] on 26th April. He showed me a report by his experts indicating that while there was quite possibly some oil in Timor, the expenditure of about 250,000 would probably be necessary even to ascertain the possibilities. Also that Dodson [4] and his associates in Australia had no oil organization or experience behind them. We agreed that the most practical course to be adopted would be for the United Kingdom Government to approach both the Anglo-Iranian and Shell, put the facts before them, including political aspects, and suggest that they should take hold of the position. I also urged that the Mines Department be represented at the next Foreign Office meeting.

Meeting held on Monday evening with Butler [5] and Foreign Office officials, the Ambassador at Lisbon [6] and Mr. Cecil Rigby of the Mines Department. Rigby reported that Cadman had now seen Anglo- Iranian and Shell and they were considering geological survey of both the eastern and western areas in the near future, probably by small expedition recruited from their staffs in Australia or Borneo. Shell representative had stressed that Anglo-American Company must also be consulted.

It was generally agreed that the above course most desirable and that Mines Department should urge Companies to go ahead with both Dodson and American Company at once. Dodson should therefore remain in London until action decided on but immediately afterwards return to Australia in order to fulfil obligations under the eastern concession (possibly stopping off at Lisbon to reassure the Portuguese authorities).

I urged that we should now discontinue proposal to buy Wittouck [7] out while at the same time trying in every way to stiffen Portuguese to resist further Japanese pressure, co-operation with American Company being particularly valuable in this respect.

Butler stressed the value of joint effort by the United Kingdom Commonwealth and Dutch and the head of the Far Eastern Department [8] urged the desirability of responding to the efforts of co- operation vis a vis the Japanese by Dutch Ministers both in London [9] and Lisbon. [10] It was agreed that the Foreign Office should now send for Dutch Minister, tell him that so far as oil was concerned Shell (and Anglo-Dutch) companies were now interested in the matter and, so far as mineral, agricultural and shipping development was concerned, ask him what his Government was prepared to do.

Question of airline was raised by Dutch Minister when he visited the Foreign Office on 18th January but I have asked the French [sic] Office to endeavour to keep off this aspect having regard to the views expressed in the last paragraph of your telegram of 18th March. [11] I have again urged the Ambassador at Lisbon to press immediately on his return to Portugal for finalization of agreement for Darwin-Dilli air service.

1 The number has been taken from the copy in series FA: A3195, 1.2902.

2 Documents 137, 161 and 181.

3 Chairman of the Anglo-Iranian Oil Company.

4 Representative of Oil Concessions Limited.

5 U.K. Parliamentary Under-Secretary of State for Foreign Affairs.

6 Sir Walford Selby.

7 Managing Director of the Asia Investment Company.

8 R. G. Howe.

9 Jonkheer E. Michiels van Verduynen.

10 Baron B. P. van Harinxma thoe Slooten.

11 Document 104.

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