TIMOR

In continuation of H.25 [1], the following is a note on three
recent developments of which you will no doubt have been informed
already either directly from the British Consul-General at Batavia
[2] or from other sources.

(A) CONSULAR VISIT TO TIMOR

The suggestion was made in a recent despatch from the Consul-
General at Batavia that an official investigation on the spot of
conditions in Portuguese Timor would be well justified in present
circumstances. It was proposed that the visit should be made by
Vice-Consul Lambert [3] who is at present, I understand, at
Batavia, and that among its objects should be to ascertain the
extent, if any, of Japanese penetration and the attitude of the
Portuguese authorities towards foreign concessions. The suggestion
has been approved and it has been pointed out that the visit is
likely to prove as valuable to the Commonwealth as to the United
Kingdom Government. It has also been suggested that the
Commonwealth Government might care to prepare a questionnaire and
forward it to Consul-General Fitzmaurice at Batavia on which Mr
Lambert would obtain information. It is at present intended that
Mr Lambert should leave Batavia on 14th December.

(B) AIR CONNECTION WITH DILLI

The suggestion made by the new Governor of Portuguese Timor [4]
for a regular air connection betwcen Dilli and the outer world,
preferably by a British Company, was reported fully in Batavia
despatch No. 125 of 30th August last. [5] The proposal was further
discussed between the Consul-General and Mr Hudson Fysh [6] on the
occasion of the visit of the latter to Batavia shortly afterwards.

Mr Hudson Fysh expressed himself on that occasion as personally in
favour of such a connection with Dilli if it proved practicable
and he told Mr Fitzmaurice that he would take the matter up with
Imperial Airways and the Air Ministry in London. On arrival in
London Mr Fysh wrote in this sense to the High Commissioner [7]
and it is understood that he has since been in consultation with
the Air Ministry, with what results it is not yet known. Meanwhile
the Consul-General's reports on these conversations had aroused
interest in the same quarters in the Foreign Office referred to in
H.16. [8] It was pointed out that the proposal to include Dilli in
the Qantas Empire Airways route between Singapore and Darwin might
conveniently be linked with the other suggestion now on foot for
an extension of Australian influence in Portuguese Timor, namely,
development of the Staughton oil concession. The view was
expressed that if the hoped-for exploitation of the concession
went through the Commonwealth Government might find that the
logical consequence was the development also of communications
with Portuguese Timor. With this in mind a Foreign Office enquiry
was made of the Air Ministry as to the feasibility on practical
grounds of including Dilli on the Singapore-Darwin route. The Air
Ministry replied, however, that from an operational point of view
Koepang was preferable and that there were sufficient difficulties
already in the establishment of the route without the additional
one which the inclusion of Dilli would involve. An important point
was that the accuracy of the weather reports essential for
crossing the Timor Sea could not be relied on from the Portuguese
side. The Air Ministry therefore suggested that if it was desired
to connect Dilli with the Singapore-Darwin route this might be
done by a shuttle service, preferably at the direct request of the
Portuguese. According to the individual view at the Foreign Office
already referred to, these objections, although weighty, might
well be modified when political considerations are taken into
account. In the same opinion, the question of whether the
political advantages would outweigh the operational disadvantages
of using Dilli instead of or as well as Koepang would seem to be
closely connected with the question of the action which the
Commonwealth Government might be prepared to take to obtain a firm
commercial footing in Timor in order to keep the Japanese out.

Supposing such a policy were decided on the desire of the
Portuguese for an air connection with Dilli could perhaps be used
as a bargaining factor in aid of the Australian concession.

(C) WITTOUCK CONCESSION

It will have been observed that the new Governor of Portuguese
Timor gave the impression in Batavia that he had suspicions as to
the genuineness of Wittouck's activities in Timor, and he seemed
favourably disposed towards the continuance of the Staughton
concession. Meanwhile, a copy has been received here of an
elaborate volume descriptive of the investigations pursued in
Portuguese Timor by the Allied Mining Corporation. This
publication has been commented on at length in Batavia despatch
No. 137 of 10th September [9] of which you will have had a copy.

It is sufficient here to note that the book has been prepared
obviously at considerable expense. It contains a great number of
diagrams, charts and photographs, some of which last reveal the
decidedly modern character of the Corporation's establishment at
Dilli.

2. You will have noted that the Consul-General at Batavia reported
in a despatch dated 14th September [10] that he had been informed
that a Japanese named Segawa had been to Lisbon on behalf of the
Nanyo Kohatsu Kaisha and completed a deal whereby Dr Luiz [11]
transfers to a new company the lands of the Sociedade Agricola.

According to the Consul-General's information this will form part
of the assets of a new Portuguese-Japanese company under the
management of Mr Owada.

3. Copies of a letter from the Minister of External Affairs to the
Consul-General at Batavia dated 18th August, 1937 [12], and of the
Consul General's reply dated 9th September [13] have now been
received at this office through the Foreign Office.

ALFRED STIRLING