File No. 832.032/16
A summary is enclosed, also, of the financial features of the
message.1 This shows
that the Government’s situation is better than it was but that resort
has again been had to a considerable extent to the issue of paper money
which is designated as an indirect loan which distributes itself
insensibly.
[Enclosure—Translation]
Message of the President, delivered at Rio de
Janeiro May 3, 1918
The National Congress, in adopting the measures recommended in the
message of November 3 and other measures which their patriotism
suggested to them, passed our declaration of war which, properly
approved, was published under No. 3393, dated November 16, 1917.
This law authorized the Government from that date until the 31st of
December of the same year to establish martial law in those parts of
the Union where the situation required it, and adopted other
measures among which were, that contracts and operations realized
with enemy subjects were invalid; that reprisals might be decreed,
that public contracts and concessions, concerning government land,
might be rescinded or revised; and authorized the dissolution and
liquidation of partnerships and corporations in which enemy subjects
were included. It established the basis upon which union, banks,
factories, and storehouses could be considered enemy property;
treated of double nationality and naturalization; the registration,
inscription, fiscalization, sequestration, administration and
eventual liquidation of enemy property; enemy life insurance
companies operating in Brazil; and directed the deposit in the
National Treasury of funds realized from any of the above operations
with reference to enemy property. It gave approval to the steps
taken by the Government under the provisions of law in accordance
with decree No. 3361 of October 26, 1917. It authorized the opening
of credit for the execution of the said law and put the law into
effect immediately.
The outbreak of the war led the belligerent Governments of the
Entente and the nations which were associated with them to unite and
coordinate their assets against the common enemy with the purpose of
effecting the triumph of the cause of liberty, justice, civilization
and humanity. To this end inter-Allied conferences have been held,
in which plans of campaign and other steps of common interest were
determined.
The Brazilian Government was invited on the 13th of November to send
a representative to the conference of that nature which was held in
Paris on the 30th of that month and closed its sessions on the 3d of
December. Dr. Olyntho M. de Magalhães, our present minister to
France, was immediately designated of this representation and took
part in the deliberations of that conference.
In January of the present year the Ministry of Blockade of the French
Government asked the Brazilian Government to designate a delegate to
participate in the work of the Permanent International Committee of
Economic Action, created by the First Inter-Allied Conference of
March 19, 1917.
In response to this courteous invitation the Government on the 26th
of January designated our Minister in Paris to represent Brazil in
this capacity on committees or inter-Allied conferences which might
there be called together. Dr. Olyntho de Magalhães took part on the
23d of February in the first deliberation of the said Permanent
International Committee of Economic Action.
With reference to the steps taken by the Federal Government for the
prohibition of shipment of contraband merchandise and other
interdictions imposed upon the enemy, our delegate was authorized to
declare to this committee that our law authorizing the declaration
of war prohibits the Germans from foreign commerce, whether of
importation or exportation, and prohibits our national steamers from
transporting enemy cargo, and to say that all merchandise consigned
to them carried in neutral ships are held in Brazilian customhouses;
that the same law does not permit the enemy to remit funds to
foreign countries and has rescinded all contracts for public works
or services which have been made with enemy subjects; that among
other measures of reprisal and national defense it was also
prohibited for them to obtain concession of land.
Our war measures follow the general lines of other belligerent
countries with the exception that Brazil has not confiscated enemy
property or stopped their internal commerce, which latter step is in
accordance with the acts of the United States of America.
The Government of Brazil has endeavored to give practical expression
to its entire accord with the Allied powers in the war in which they
are all engaged against the German Empire and has so advised the
British Government. The British Foreign Office in a note of the 21st
of December, 1917, directed to our Legation in London, in thanking
us for this communication, inquired if we
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could send a fleet of fast cruisers and
destroyers to cooperate at a certain point under the orders of the
English vice admiral in command of the section.
On the 31st of December our Minister in London was authorized to
communicate to the British Admiralty that in accordance with our
desire to render substantial cooperation a fleet was being prepared
of the scouts Rio Grande do Sul and Bahia, destroyers Parahyba,
Rio Grande do Norte, Piauhy and Santa Gatharina, which
would proceed to European waters under the single naval command to
the point designated and that those ships were prepared to arrive
there upon a date to be determined.
Afterwards the Legation of His British Majesty in this capital, in a
note of the 11th of February, advised that the British Admiralty
considered that the units of the Brazilian Navy which expected to
cooperate with the British naval forces would render better service
to the cause of the Allies if they should proceed to a different
point than that which had previously been decided upon and there
cooperate under the command of a high-ranking British naval officer
in conjunction with a detachment of the Navy of the United States of
America, which at that time was stationed at the said point.
This new resolution could not fail to be agreeable to the Brazilian
Government in view of which our warships and those of the United
States would cooperate with the British naval forces for the
purposes of protecting and maintaining the principal maritime routes
between the two continents.
This will be the second instance of cooperation of the two navies of
this continent since in the middle of last year the Brazilian
Government entered into an agreement by which its naval forces would
patrol the Brazilian coast in cooperation with the squadron of the
United States of America.
I turn now to the very important matter of the relations of our
commerce to that of foreign countries. I desire to refer to the
policy of economic defense which the British Government and her
allies have adopted against the common enemy in creating the black
lists, which prohibited commerce of firms of their nationals with
subjects of enemy countries, the principal of which is the British
Statutory List created by the Trading with the Enemy Law of 1915. It
is unnecessary to repeat what was said on this subject in previous
annual messages, it is enough to add that important notes were
exchanged on the 9th and 12th of August, 1916, between our Ministry
of Foreign Affairs and the British Legation. The Ministry again
reopened the matter in a note of September 3d, 1917, addressed to
the said Legation and in which the previous notes were reviewed,
recognition duly granted, and attention invited to the fact that
this Government has always secured a modification of unjust or
unduly severe measures, and proposed the following:
The situation, however, cannot be limited to the concession
of favors. The successive and recent proclamations setting
forth new additions to the statutory list, especially after
investigation, require a corrective measure of a more or
less general nature.
The suspension of commercial relations with Germany and the
declaration that Brazil is no longer neutral in the war
should define the situation and facilitate a consideration
of this vital matter.
With the special fiscalization which the circumstances have
imposed upon maritime commerce and navigation, the Brazilian
Government believes it convenient to make a more rigorous
examination of the methods under which those operations are
carried on with the idea of avoiding, if possible, measures
which affect adversely friendly countries, and in view of
the fact that Brazil is no longer a neutral nation this
examination cannot fail to interest and affect domestic
commerce inasmuch as it provides the connection from which
foreign commerce is derived.
To this end and without recognizing the principles upon which
it was promulgated nor of having a statutory list of her
own, the Brazilian Government desires and hopes that all
cases individually will be submitted to it in which it is
planned to take action.
After an exchange of explanatory notes, one from the Legation dated
the 8th and one from the Ministry dated the 10th, stating that the
names to be submitted to the Brazilian Government would be only
firms or persons who were entirely Brazilian and that if the
proposal of that Government were accepted it would take all the
necessary steps for the defense of Allied commerce, the Legation
communicated, in a note of the 12th of the same month, the
provisional
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assent of its
Government, pending an examination of the details of the Brazilian
proposal and adding that the agreement would be effective as of the
same date. Such a British-Brazilian agreement should have been
concluded before the declaration of a state of war between Brazil
and the German Empire. After this latter condition was recognized
and proclaimed, therefore, the Foreign Office set forth these facts
in a note of the 30th of November, addressed to the British
Legation, the essential features of which are herewith
reproduced.
This agreement, made before the declaration of a state of war
between Brazil and the German Empire, is, for that reason,
virtually void since it would be absurd to maintain it when the
Brazilian Government has the greatest desire to supervise the
acts of such firms and since it is so authorized to do by act of
Congress. It would, therefore, not be proper for it to delegate
its powers under the circumstances and in consequence of law
3393 of the 16th instant the Brazilian Government through the
intervention of his excellency declares to His British Majesty,
as a friend and ally, that it assumes as its duty the
supervision of enemy firms without distinction of nationality in
all Brazilian territory and that there is, therefore, no
necessity for a function to be exercised here parallel to that
of the Government and sovereignty of Brazil.
In the same terms and on the same date with the necessary
modifications other notes were addressed to the Portuguese Embassy,
and to the French, Italian and Japanese Legations.
The merchant ships anchored in Brazilian ports, the utilization of
which was authorized by the national Congress and which have been
under the control of the Brazilian Government since July 17, 1917,
have been turned over to the Brazilian Lloyd with the idea of their
being employed as the necessities of navigation and commerce should
determine. The Brazilian Government received the courteous appeals
which were directed to it from the French and United States
Governments urging that a contract be entered into for the better
utilization of these ships of the Brazilian Lloyd. The Ministry of
Foreign Relations, with my authorization, took up the matter of the
political and diplomatic negotiations necessary. The Legations
concerned were advised that Brazil would show no preference between
the Allied nations which were contesting for the control of the
ships; neither would she alienate the ships which were taken in
reprisal for the tonnage which the enemy had destroyed. When the
conditions of the understanding had been decided upon, the United
States Government withdrew in favor of France and the agreement
solicited was made with the Government of the latter country. The
ship transaction was thereupon transferred to the Ministry of
Fazenda which fixed the clauses and conditions of the agreement
after a study of their financial aspects. When a report had been
submitted upon this matter I did not hesitate to approve the
arrangement, being certain that the said agreement operated to the
advantage, not only of Brazil, but of France and of the other Allied
nations in whose name in all stages of the negotiations the latter
country declared herself to be acting.
