File No. 832.85/21
The British Embassy to the Department of State
Memorandum
The British Embassy have the honour, with reference to their memorandum of August 19, to inform the Department of State that, according to a telegram from His Majesty’s Minister at Rio de Janeiro, the French Government offered to make large purchases of Brazilian coffee on condition that the Brazilian Government sold to France or chartered to the United States the German vessels now in Brazilian ports, for the conveyance of coffee and American troops to France.
The Brazilian Minister for Foreign Affairs subsequently informed the British Minister that it had been decided not to accept the French offer on the ground that the Government hold the ships in trust for Germany and must return them after the war. They desired, however, to recognize the solidarity of their interests with those of the Allies and, for this purpose, they proposed to establish a line of steamers to Europe which would comprise the German ships and the ships of the Brazilian Lloyd. As regards the ships of the Commercial and Navigation Company, they proposed to sell or charter ten to France and three to the United States. These ships only amount to about 25,000 tons.
The British Government attach great importance to these German vessels being placed in service in the Allied interest as soon as possible, but the Embassy are instructed to ascertain the views of the United States Government as to the attitude to be adopted in the matter of the recognition of the transfer of the vessels to the Brazilian flag, seeing that the Brazilian Government apparently intend to return them to Germany immediately on the conclusion of hostilities and may even intend to hold the earnings in trust for Germany.
[Received September 4.]