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

366. Memorandum of a Conversation, Department of State, Washington, August 28, 1957¹

Washington, August 28, 1957

SUBJECT

• Call Upon the Secretary by Ambassador Briggs

PARTICIPANTS

• The Secretary
• The Honorable Ellis O. Briggs, American Ambassador to Brazil
• Mr. William P. Snow, Acting Assistant Secretary of State for Inter-American Affairs

Ambassador Briggs called to see the Secretary this afternoon at 2:30 to pay his respects and to discuss our relations with Brazil.² The Ambassador informed the Secretary that our relations with Brazil were, generally speaking, on a firm and friendly basis. This could be said especially of our political and economic relations. On the military side, matters were not proceeding quite as comfortably, mainly because Brazil as an emerging world power was inclined to feel that our military assistance was not on a scale commensurate with Brazil’s importance as a trusted ally and with its relative importance as compared with the other Latin American countries.

The Ambassador mentioned that Brazil had a population of 60 million people now and expected to have 100 million by 1980. These figures, together with Brazil’s known and potential resources, would help to explain Brazil’s coming role in the world. The Secretary commented that mere size of population did not connote world power, even when coupled with abundant natural resources. It depends upon what you do with them. India and China had vast populations, and China, at least, had been quite well endowed with resources, but hitherto these nations have not exerted the necessary energy and skill or followed the right policies to develop a status equal to their size. Recently, it was true, Red China had begun to move toward industrial and military strength but the reason obviously was that Russia had been giving substantial support in money, materials and technical assistance.

Brazil seemed to have continuous problems of a financial nature, the Secretary recalled. When he first assumed office, there had just been prepared a joint economic survey indicating a need for several hundred million dollars of U.S. public capital for development purposes, and there had been rather difficult discussions about that. He asked how much Export-Import Bank credit was outstanding now with Brazil. Ambassador Briggs and Mr. Snow replied that the Bank had made loans of approximately 1.2 billion dollars to Brazil since 1934; the balance outstanding at present was $416 million. The Secretary referred to Brazil’s aversion to foreign private capital investment as illustrated by the petroleum situation. With petroleum imports taking as much as one-third of the country’s available foreign exchange, Petrobras, the government monopoly, stood as a barrier to the entry of foreign private companies, who could probably do the most toward increasing production if allowed the opportunity. The United States had been developed by British and French capital in the main. Canada was now going forward at a surprising rate on the basis of abundant U.S. private capital. It was unfortunate that nationalistic sentiments in Brazil stood in the way of a similar process.

Ambassador Briggs pointed out that Senator Morse³ might be visiting Brazil and other Latin American countries this fall in furtherance of his strong interest in our petroleum policy. He thought we might wish to be prepared for the Senator’s further critical probings into our policy.

Speaking again of the Brazilian military, the Ambassador said that, by and large, the Armed Services were content to support constitutionality rather than to take political power themselves, although there had been occasional exceptions to this rule. President Kubitschek, however, was to a considerable degree dependent upon the good will of the Services for his continuance in office and sought to keep them satisfied as well as united in the political sense.

The Secretary asked how it could be, as reported to him by Secretary Robert Anderson, that a favorable coffee crop might actually have an unfavorable result for Brazil financially. The Ambassador replied that last year’s crop had been a large one; if as expected, the present crop were also to reach bumper proportions, the market price of the commodity might drop considerably, with adverse results to the foreign exchange position of the country. The dollar exchange level was already surprisingly low.

The Ambassador also spoke briefly about current negotiations involving military equipment, the guided missile tracking station, and other pending issues.

1. Source: Department of State, Central Files, 611.32/8–2857. Official Use Only. Drafted by Snow.
2. In a memorandum dated August 27, Snow briefed Dulles on the scheduled meeting with Briggs, noting that he was “calling to pay his respects and to report on the state of our relations with Brazil. He will raise no special problems requiring your personal attention.” (Ibid., 611.32/8–2757)
3. Wayne Morse (D.–Ore.).