File No. 832.85/40

The Ambassador in Brazil ( Morgan ) to the Secretary of State


The Brazilian Minister for Foreign Affairs will advise the President to request the American Government to arrange with the Governments of France and Great Britain, especially the former, a plan by which something over 30 of the units of the ex-German fleet, which have been taken over and incorporated into the Lloyd Brazilian fleet, shall be employed to meet the necessities of Brazilian commerce and to assist the common cause of the Allies, both commercial and military. These vessels are not ready for sea, are in need of repairs, and are all over 4,000 tons register. The United States would charter them for a year with the privilege of extension on the same terms, would repair them in United States shipyards, and would control the arrangements with the said Allies for their employment.

The French Minister made a proposition to the Brazilian Government some time before ours was received to charter 10 vessels of the Companhia Commercio e Navegação; but when these ships were found to be unsatisfactory in tonnage, the ex-German fleet was substituted for them. Brazil’s wish to export to Europe coffee, rubber, and beans was played upon. The charter price suggested was about what the United States is paying for similar vessels ready for sea.

The Minister’s proposition provided for the establishment of a triangular passenger and cargo line of ex-German ships between Rio de Janeiro, New York, and France. Presumably he planned that France should subcharter many of the units to us, as well as others of the two French lines to South America which would be withdrawn when the new line was started. Brazil was so captivated by the prospect of extending her export facilities that she did not see that France would enjoy the charter income that otherwise might be hers.

[Page 336]

The Foreign Minister estimates that exclusive of the unrepaired vessels of the ex-German fleet, the Brazilian merchant marine represents a little over 1,600,000 tons and that Brazil’s present annual exportation amounts to 2,000,000 tons. He favors the creation of such a line as the French Minister proposed and hopes the idea may enter into our plans to insure protection to Brazil’s present and future foreign trade. Its incorporation would weaken the President’s continued disinclination to part with any of the ships ancl would remove the embarrassing criticism of exporters.