Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

339. Memorandum of a Conversation, Panama City, July 22, 1956¹

Panama City, July 22, 1956

PRESENT

• The President
• Lt. Col. Vernon A. Walters
• President Kubitschek
• Ambassador Amaral Peixoto

President Kubitschek opened the talk by expressing his gratitude to the President for receiving him and his pleasure at seeing how far he had recovered from his recent operation. He said that he had no intentions of taking up the President’s time with a mass of unimportant details. He merely wanted to say that he had seen on the previous night the members of the Brazilian Economic Mission who had recently been in the United States. He was very well satisfied with what they had told him regarding the talks they had held in the United States. There did not seem to be any major problems on which there was sharp disagreement. There was, however, one matter on which he would be grateful if President Eisenhower would look into the question and that was the matter of wheat. If some satisfactory arrangement could be arrived at on this, it would strengthen his hand for taking a firm line against the Communists in Brazil. President Eisenhower said he would look into this matter and asked Ambassador Amaral Peixoto whether this had been brought to Secretary Dulles’ and Mr. Holland’s attention. The Ambassador said that it had and the President again said that he would look into the matter.

President Kubitschek then said that the Communists’ main effort in South America now was directed at making trouble between the United States and the countries of Latin America. The President said that the new Communist line of sweetness and light was perhaps more dangerous than their propaganda in Stalin’s time. He said that now they were preaching “nationalism” rather than “internationalism” and in some places this had an even greater attraction.

President Kubitschek said that he was attempting to solve a number of Brazil’s economic problems and that their solution would make his hand even stronger in dealing with the Communists in Brazil.

He thanked the President for seeing him and said that he did not wish to take up any more of his time. He and Ambassador Peixoto then took their leave of President Eisenhower.²

1. Source: Eisenhower Library, Whitman File, International File. No indication of the drafting officer appears on the source text. The conversation was held in President Arias’ suite at the Hotel El Panama.

2. In Secto 7, July 23, Assistant Secretary Holland transmitted the text of an unsigned note from Kubitschek to Eisenhower. In the note, the Brazilian President stated that he had been informed of the conditions under which the United States would be prepared to supply Brazil with 1.8 million tons of surplus wheat. “Since these conditions are the most favorable ones that your government is in a position to offer,” he wrote, “my government is prepared to accept them. I would highly appreciate it if a decision could be reached on a firm commitment for the sale of the above mentioned quantity, in order to enable me to implement measures relevant to the economic development program of Brazil.” (Department of State, Central Files, 411.3241/7–2356)

   On July 31, President Kubitschek officially announced that Brazil had concluded a new loan agreement with the Export-Import Bank and that negotiations with the United States were underway regarding a surplus wheat transaction. The P.L. 480 wheat agreement was signed in Washington on December 31, 1956, and entered into force on the same date; for text, see 7 UST (pt. 3) 3475.