Cablegram unnumbered 27 April 1940,
SECRET
Your 272 and 270 from Stirling. [1]
You will have noted we have emphasised all along that too much importance should not be placed on obtaining western oil concession with view to excluding Japanese. We feel in light of recent information about Portuguese promises to Japanese, that proposal to buy out Wittouck [2] will not greatly further objective in mind and should be discontinued in favour of strong efforts by Oil Concessions to develop their own area as rapidly as possible.
As set out in my cablegram 19th April [3] we are doubtful whether Oil Concessions can develop from their own resources, and your own impression is thus confirmed. Company has not yet taken any action in Australia to raise capital, and are waiting on result of Dodson’s negotiations in London before embarking on active steps.
If Dodson cannot obtain London support, either from major oil company or financial houses, it is problematical whether necessary capital would be subscribed in Australia at present time. This week, however, Company advised that Dodson had cabled that prominent London brokers would subscribe large private capital if Anglo-Iranian became interested parties. Company also stated that certain Australian groups were anxious to participate, but no concrete particulars of this were supplied. Minister External Affairs [4] has interviewed directors and keeps in dose touch with their activities. He is not satisfied that they have sufficient business acumen or financial backing to make success of concession without strong backing mentioned my cable 19th April. At moment they seem to be relying almost entirely on Dodson’s efforts. Hence think it desirable action should be taken to enlist financial support from London end, and you may be in position to assist in this respect.
MENZIES
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1 Documents 176 and 171.
2 Managing Director of the Asia Investment Company.
3 Document 161.
4 John McEwen.
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[AA: A981, TIMOR (PORTUGUESE) 22, v]