File No. No. 763.72112/7160
The Ambassador in Brazil ( Morgan) to the Secretary of State 1
[Received 5.25 p.m.]
[President of] Brazil has declared martial law in Federal District and States of São Paulo, Paraná, Santa Catharina, and Rio Grande and has approved law regulating trade and other relations with enemy within and without the Republic which is fairly satisfactory.
Since Brazil is timid about destroying entrenched Herman interests on account of possibility of reprisals, it will be well, however, to invite attention of Brazil’s representative at coming conference of Allies to the necessity of strict enforcement of the law, since the suppression of a dozen powerful German banks and commercial houses which constitute an active German peril by exercising detrimental influence on commerce and stimulating the German loyalty of colonists in the southern States would be the most effective immediate contribution which Brazil could make to the Allied cause. The suppression of these houses would directly benefit us.
- Repeated in paraphrase by the Secretary of State to the American Embassy in France for Colonel House, Nov. 24, 1917. (Same file number as above.)↩