832.5151/261: Telegram
The Ambassador in Brazil (Gibson) to the Acting Secretary of State
[Received 8:28 p.m.]
126. My 124, December 21, noon. Representatives of Shell, Texas, and Atlantic Refining Companies called this afternoon to inform me they are not receiving exchange cover from Bank of Brazil. For instance, they have received only 4 days allowance in first 21 days this month. They have not asked help of Embassy as they are still negotiating with Ministry of Finance.
Figueiredo tells these and other applicants that he is unable to carry out his undertakings as he has no foreign exchange. There are various indications, however, that exchange does exist. It is difficult to secure reliable information on the subject here but there is some reason for feeling that the Government is accumulating exchange possibly in conjunction with the agreement as to French frozen [Page 75] credits—now being negotiated—or even to have some ready cash on hand in the event of emergencies.
Last sentence telegram No. 124 was intended to point out desirability of avoiding heavy-handed action like that of French Government which has not proved successful. For the present at least it might be well to rely on such measures as withholding approval of exchange purchases which seem calculated to achieve desired results without arousing public resentment.