832.3421/38: Telegram

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

Your May 31, 3 p.m. Inform Brazilian Government that large American shipyard constructors and steel manufacturers are very much interested. If Brazilian Government will furnish them with general outline of the shipbuilding and steel making programme, American concerns, experienced in the construction of the most modern shipyards and steel plants will submit plans and proposals which they are confident will be more satisfactory than those offered by Vickers, Armstrong.

Confidential. While it is not probable that an undertaking of this magnitude proposed by Vickers, Armstrong could be started or financed during the war, if such a contract is to be granted under the terms mentioned in your telegram, it is of the utmost importance to our interests in Brazil that no other than an American company should eventually secure it and the vast amount of trade it would control, and therefore American companies should also submit proposals to build these plants as soon as possible.

The Department desires your views by cable as to whether the inclusion of the proposal by Vickers to manufacture steel using Itabira property would be a controlling factor in awarding the contract for the shipyards.