File No. No. 763.72112/7161

The British Ambassador ( Spring Rice) to the Counselor for the Department of State ( Polk)

No. 503

My Dear Mr. Counsellor: I beg to enclose herewith, under instructions from my Government, summary of telegraphic instructions [Page 344] which have been sent to the British Minister at Rio, regarding financial measures to be adopted by the Brazilian Government.1 I have the honour to enquire whether you will be prepared to send instructions to the American Minister at Rio to support Sir A. Peel’s representations.

Believe me [etc.]

Cecil Spring Rice
[Enclosure]

Summary of Telegraphic Instructions Sent by the British Government to the British Minister in Brazil ( Peel)

Memorandum

When you consider that a favorable moment has come, you should inform the Brazilian authorities of the desirability of adopting the following measures connected with the financial blockade of the enemy:

1.
A controller should be appointed for all German banks in Brazil, which should only be allowed to carry on business subject to license, pending their being wound up.
2.
Returns should be made by all banks in Brazil of all funds and securities held by them for enemies.
3.
Embargoes should be placed on all German and Austrian balances and securities held by banks in Brazil, and their transference should be prohibited, not only to Central Powers, but to neutrals.
4.
All banks in Brazil should require of any customer in Brazil purchasing neutral currency of them, or ordering remittances to neutral countries, to sign a declaration that such transaction (a) is in no way connected directly or indirectly with an enemy, and (b) is not for investment or speculation purposes.
5.
All banks in Brazil should be required to obtain from all banking correspondents in other South and Central American countries which are neutral undertakings similar to that required by London banks of their banking correspondents in Central America and South America. It would be better, but not necessary, that this undertaking should be also obtained of banking correspondents in neutral European countries.
6.
All banks in Brazil should make a daily or weekly return of all transactions involving sale or purchase of foreign currencies or remittances abroad. Return might be divided into two, one showing neutral currencies and remittances, and the other Allied currencies and remittances.

In addition you should point out that it is highly desirable that a strict censorship of all financial cables and letters should be conducted in collaboration with the Allies. In this connection you should inform the Brazilian Government that financial traffic between banks in Brazil and neutral Europe, especially Spain, has [Page 345] been large and continuous, and of great assistance to the enemy. This refers not only to direct traffic but to traffic through Brazil from other Central and South American countries.

  1. The enclosure was forwarded to the Secretary of the Treasury Nov. 23.