Memorandum by the Chief of the Division of Latin American Affairs (Wilson)

General Palmer E. Pierce, Assistant to the President, Standard Oil Company of New Jersey, and Mr. E. P. Thomas, President, National Foreign Trade Council, called on Mr. White37 by appointment; Mr. E. C. Wilson was present. They said that they intended to have a talk with Dr. Numa de Oliveira in New York regarding frozen commercial credits in Brazil and would like to get such information as was possible respecting the discussions that had taken place in Washington with the Brazilian delegation.

They were informed in confidence of the discussions concerning exchange control and of the assurances given by the Brazilian delegation regarding completely fair treatment for American interests.

They inquired whether the “plan” in Mr. Kent’s letter to the Department38 had been discussed with the Brazilians. They were shown Mr. Kent’s letter, which in fact arrived after the discussions with the [Page 52] Brazilians had ended, and which contained no “plan” but merely stated that he would be glad to submit a plan for working out exchange difficulties in Brazil if the Department so desired. Messrs. Pierce and Thomas were told that arrangements had been made for Dr. Numa de Oliveira to meet Mr. Kent in New York, and have a talk with him this morning.

General Pierce said that the group of American exporters dealing with Brazil which had for some months past been discussing ways and means to clear up their exchange difficulties in Brazil, had been unable to come to any concrete result. It had once been arranged that Mr. Schoepperle of the National City Bank would go to Brazil, but this arrangement had fallen through. The inquiry was made of Messrs. Pierce and Thomas whether they had tried to get the assistance of American commercial banks in working out their difficulties. Private British banks had extended a loan of six and a half million pounds to Brazil, a large share of which had gone to pay off American banking credits to Brazil, and this British credit had now been paid up in full by Brazil. Furthermore, we understood that the Bank of Brazil was on the point of obtaining an additional credit in Great Britain. If the Bank of Brazil was a good risk for British bankers it was hard to understand why American commercial interests with their bankers could not get together and arrange to finance this matter of liquidating frozen commercial credits. General Pierce said that commercial banks in New York were not interested but that they had some hopes of getting the Reconstruction Finance Corporation to assist.

Messrs. Pierce and Thomas were told that this seemed to be a matter which private interests concerned should work out with Brazil and that we felt the Department had given them considerable assistance in obtaining the declaration from the Brazilian Government that completely fair and undiscriminatory treatment would be given American interests in the allotment of exchange. With this to work on as a basis we very much hoped that private interests could come to some arrangement which would permit the liquidation of frozen milreis accounts and provide adequate exchange for current transactions.

It might be added that during the conversation General Pierce volunteered the information that the Standard Oil Company was getting full cover for its current sales in Brazil. He said that gasoline and oil were necessities and that the Company, acting in concert with the other oil interests in Brazil, had brought pressure to bear on the Brazilian Government which resulted in their being granted sufficient exchange for current transactions. They have, however, considerable frozen milreis credits on account of past business.

Edwin C. Wilson
  1. Francis White, Assistant Secretary of State.
  2. Mr. Kent’s letter of May 19, not printed.