832.51/802: Telegram
The Ambassador in Brazil (Gibson) to the Secretary of State
[Received October 26—12:40 a.m.]
105. Lunched today with Minister of Finance at his invitation. He went into considerable detail as to the history of present project for meeting foreign obligations saying that he considered it essential that Brazil should begin to pay something, that he had worked out what he conceived to be a fair plan, adding that the only consultation and guidance he had were from Sir Otto Niemeyer but that he would have welcomed similar American guidance had it been offered. He said that he had not intended to negotiate with any government on this subject and that for that reason he had sought Fred Kent’s advice as doubtless representing our views but without making it necessary to go into detailed discussion with other governments. He then said that the matter was rather urgent as, for internal political reasons, he was anxious to make public announcement of some plan before the meeting of the Constituent Assembly November 15th. I therefore trust that we can bring forward all our views as expeditiously as possible in order that no more unnecessary time may be lost.
Aranha said that he was honestly desirous of meeting any reasonable views on our part, that this statement could be taken at par because it was based on his conviction that real Brazilian prosperity was dependent on developing the best possible relations with the United States, and he went so far as to say if it proved to be necessary he was prepared to negotiate a separate and special agreement with us on the question of foreign obligations.
The press here has carried no adequate description of the committee on foreign debts referred to in the Department’s 84.68 I was therefore obliged to improvise a description of it which he professed to consider showed the desirability of letting it pass on the subject.
In the course of the conversation he repeatedly referred to Kent and the confidence felt in him by the Government and by the members [Page 88] of the Commission to Washington and London and inquired in guarded terms whether I thought it would be possible for Kent to come down here and talk things over with a view to some expeditious settlement. I told him that I had no idea as to whether Kent’s duties would permit him to absent himself from the United States at this time or whether he felt that this was a matter with which he could deal. Personally, if the Department feels warranted in suggesting the journey to Kent, I am convinced that with his broad financial knowledge we could work together for a comprehensive and more satisfactory agreement, not only on foreign obligations, but also exchange restrictions (which now seem to be reaching a critical stage and might serve as the basis for his coming), trade restrictions and other matters in which we are interested. I should be glad to have the Department’s views on this last point for my guidance in further conversations with Aranha whom I am to see as soon as the Department’s promised mail instructions are received.