File No. 611.326/175

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


Department’s September 20, 4 p.m. Fully concur with Brazilian Ambassador’s opinion that we should open credits for the purchase and storage by Brazilian Government of sufficient coffee to stabilize Government’s financial situation. Unfortunate as it may be, coffee is still the keynote of Brazil’s prosperity, and in view of the possibilities opening to us, and also probable composition of incoming administration, material assistance to the new Government upon its assumption of office would create a situation of great advantage.

Brazil’s interest obligations for 1918 are 7,500,000 pounds sterling, a half of which at least are provided for. Her interest obligations for 1919 are also 7,500,000 pounds sterling. The only steps taken to cover them were the negotiations recently carried on with Treasury Department through Doctor Rodrigues and Brazilian Ambassador, on the basis of sale and purchase of manganese. President is consulting incoming President regarding the number of bags of coffee a year which should be purchased to meet interest obligations. Will report on this in a day or two.