As you are already aware from my despatch No. 130 of the 2nd
September last [1] (of which I had the honour to send a copy to
the Prime Minister of Australia), the, Governor of Portuguese
Timor [2] had then informed me of his desire for air communication
with Timor, preferably by a British line. I spoke to Mr Hudson
Fysh, Managing-Director of Qantas on the subject when he passed
through Batavia on September 1st, and he then wrote both to his
directors and to the Administrator of North Australia [3]' so I
pressume that the matter has already recieved the attention of the
Commonwealth authorities.

2. Mr Hudson Fysh duly consulted with the Air Ministry and
Imperial Airways on reaching London, and I have been informed by
the Foreign Office that the conclusion has been unanimously
reached that 'Dilli is not suitable as an alternative to Koepang,
and that it would not be justifiable at the present time even to
survey it. The reasons are as follows:-

(a) It is very exposed from North-West to North-East.

(b) It is obstructed by very high mountains from the East, through
South to the West.

(c) It increases the mileage of the Empire route by 75 miles as
compared with going through Koepang'.

3. This conclusion seems definitely to rule Dilli out of the main
route, and if I now merely pass the Air Ministry's view to the
Governor of Portuguese Timor without further observations it may
well seem to him to close the door on the possibility of any
British air connection, and to leave only the alternatives of a
Portuguese, Dutch, or possibly Japanese, service.

4. Of these alternatives the Portuguese themselves would no doubt
prefer a Portuguese service, though it might be difficult for
Portuguese Timor to establish it without the assistance of foreign
capital. Unless such foreign capital is promptly forthcoming from
British sources-which the economic prospects of such a service
scarcely seem to render probable-the source from which capital
would most easily be available is likely, to judge from recent
developments in Timor, to be Japanese.

5. The second alternative, a Dutch service from Koepang, may seem
the most practicable and desirable from our point of view. The
Koninklijke Nederlandsch-Indische Luchtvaart Maatschappij
(K.N.I.L.M.) have, moreover, already applied to the Governor of
Portuguese Timor for permission to run such a service, but, as the
Batavia representative of the Company informed me a few days ago,
have not yet obtained a reply. It seems that the Koninklijke
Luchtvaart Maatschappij (K.L.M.) have recently negotiated with the
Portuguese Government for the use of a landing station in the Cape
Verde Islands for their service to South America, and that in
return the Netherlands Government have accorded permission for the
Portuguese to run a service from Dilli to Koepang. This opening
was, however, not made reciprocal, so no permission has yet been
given for a Dutch line to Dilli. It is, I think, by no means
certain that the Portuguese authorities will readily grant
permission for such a service. During Mr Consul Lambert's recent
tour to Portuguese Timor the Governor made no concealment of his
mistrust of Dutch friendship, and that impecunious colony's
experiences for many years of the exorbitant freights of the
quasi-monopolist Koninklijke Paketvaart Maatschappij seem to have
generated a certain aversion from dependence on Dutch facilities.

It is therefore possible (though this is of course only
conjecture) that if a Dutch connection is the only alternative,
the Portuguese authorities may be more disposed to consider
admitting Japanese capital for an air service than they would if
there were any prospect either of an Australian service or of
Australian support for a line from Dilli.

6. In regard to the third alternative, a Japanese line, I am not
aware that any overtures have yet been made to this end, and the
present Governor of Timor is not likely to favour such a
development. I have, however, already brought the growing Japanese
interest in Timor to your attention, and it seems unlikely that
Japan intends Palao to remain for all time the terminus of the
recently arranged 'southern air service' from Tokyo to that
island. If, therefore, she acquires in Timor an increasing
ascendancy, as there is still some reason to fear, she might well
become interested in an air service. On the whole, the
establishment of a Japanese extension line from Palao to Timor
seems less likely at the moment than Japanese investment, if
opportunity offered, in a line from Dilli to Koepang or elsewhere.

7. In view of the obvious undesirability of any opening developing
for Japan to interest herself in air communications in Timor,
therefore, the Commonwealth Government may, despite the
unfavourable decision in regard to Dilli as a port of call on the
main air route, desire to give further consideration to the
question of establishing or supporting an air connection with
Dilli. I shall, therefore, be very grateful if you will kindly
inform me at an early date whether I may, after now communicating
the Air Ministry's views to the Governor of Portuguese Timor, hold
out to him any prospect of further consideration being given in
Australia to this question.

8. If Mr Peterson, the newly appointed Australian Government
Commissioner to the Netherlands East Indies, finds it possible to
visit Portuguese Timor in the course of his journey to Java it
might be worth his while to discuss with the Governor of
Portuguese Timor in a general way the question of air
communications, as well as other matters in Timor which are of
interest to the Commonwealth Government.

9. I am, of course, sending a copy of this letter to the Foreign
Office.

H. FITZMAURICE [4]