File No. 832.85/92b

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

[Telegram]

Department just advised that French representative on Allied Maritime Transport Council sitting in London made suggestion [Page 728] about three weeks ago to Council that French representatives at Rio be permitted to negotiate in behalf of the Council for charter of remaining German boats interned in Brazil. American representatives cabled to Shipping Board asking for instructions and Shipping Board, without the knowledge of the Department, cabled through the Navy Department authorizing American representatives on Council to acquiesce in plan proposed by French.

As soon as this information was given to Department, Department insisted that Shipping Board cancel its authorization to its representatives on Council and that British and French also instruct their representatives not to proceed further with arrangement.

Department’s action was taken because negotiations which have been in progress in Washington with respect to economic situation in Brazil are now coming to a satisfactory conclusion and these ships have always been considered as part and parcel of these negotiations.

The above is for your confidential information and you are instructed to intimate to the proper Brazilian authorities that this Government would not look with favor on any transaction by which the disposition of these ships was taken out of the conferences now being held in Washington which were instituted and conducted with the full consent of Great Britain, France, Italy, Brazil and the United States. It is unnecessary for you to mention this matter to your French colleague.

Lansing