832.5151/119: Telegram

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

11. Department’s telegram No. 19, February 3, 2 [5] p.m.28 A preliminary report on the exchange situation was air mailed on February 4th.

The exchange restrictions imposed by the Brazilian Government to enable appropriations from commercial exchange supply funds to be [Page 41] made to meet urgent foreign obligations have so depleted the supply as to deprive American and other foreign interests of full exchange. I am confidentially advised, however, the arrangements have been concluded whereby foreign oil companies will henceforth receive full current cover. Presumably other interests will fare as well. With the limits in May or June next of the Rothschild credit and the expected curtailment of other Government remittances it may be anticipated that the general exchange will be eased and that attention will then be given to accumulated milreis.

  1. Not printed; it inquired as to when the Department might expect a reply to its instruction No. 15, January 21, noon.