My telegram 831. [1] We have received urgent advice via Koepang
that entire Portuguese administration and military forces
numbering about 500 have retired to the hills and that Japanese
Captain of vessel NANYEI MARU is also in the hills in possession
of vessel's wireless transmitting equipment. It is quite clear
that the position continues to deteriorate and that this is due
largely to suggestions of early withdrawal by Dutch forces because
of Portugal's protest.

We feel that grave risk is involved in the fact that substantial
number of Japanese are at large in the colony in possession of
equipment useful for a Japanese air attack or landing. Moreover
withdrawal of administration from Dilli creates a position in
which de facto civil administration of colony may have to be taken
over by occupying forces.

Commonwealth Government suggests that Portuguese Government should
be informed:

(1) Allied Governments' position is endangered and threatened by
continued free presence in Portuguese Timor of Japanese, including
Consul [2] and Captain of NANYEI MARU, who are believed to have
acquired possession of equipment suitable for warlike purposes.

(2) Allied Governments wish to assist Portuguese Government but
must urge that internment or removal of all Japanese from Timor is
matter of military necessity.

(3) It was no part of intention of Allied Governments to assume
responsibility for administration of Timor, but only to ensure its
defence. Therefore Portuguese Government is requested to instruct
Governor [3] to return his administration Dilli forthwith, and to
cooperate with Commander of occupying forces. [4]

Failing early action on above lines, our Chiefs of Staff consider
that orders should be given to take military action to meet the
present dangerous position.