832.51/804: Telegram

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

107. Minister of Finance yesterday granted an interview to the press, in which he stated that he hoped shortly to make an important announcement in regard to Brazil’s foreign indebtedness; that he had progressed far in the elaboration of a plan and was awaiting only the acquiescence of one group of bankers. On inquiry as to the subjects of this statement after my recent talk with the Finance Minister, I am informed that Aranha has received a message from Dillon, Reed who claim to speak for American banking interests, stating that after consultation with Rothschilds they approve of Aranha’s plan in present form. Nevertheless Finance Minister’s statement appears to go farther than was warranted by any message from Dillon, Reed. Department may wish to inquire basis of Dillon, Reed’s activities in this matter.

Air mail instruction referred to in Department’s 8469 not yet received and in view of the urgency of the situation it may be considered desirable to give me substance of these instructions by telegraph. I think I have done everything possible at this end to safeguard our position. I have talked with the Finance Minister, to Bouças, his right-hand man, and to the Minister for Foreign Affairs; and have [Page 89] made our position a matter of record by sending the latter an informal memorandum of what I said to him in conversation embodying substance of Department’s 84. However, in view of the highly personal Brazilian method of handling public matters, there is always a possibility of their feeling that my zeal outruns that of my Government and for that reason I think it would be prudent for the Department to have a serious talk with the Brazilian Ambassador outlining our views to him clearly and impress on him that this is done in order that he may in turn impress upon his Government the serious view we take of the situation and the necessity for withholding action until an opportunity is afforded for full discussion. From conversation here, I gather that he does not habitually report fully or clearly and it would be desirable to induce him to send in a report which confirms the substance of what I have already said.

  1. October 21, 11 a.m., p. 82.