832.5151/332a: Telegram

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

36. The Department is in receipt of strongly conflicting information, both from official and private sources, as to the treatment accorded [Page 583] American commerce under the Brazilian exchange control. As an example of divergence compare report of American Consul General at Rio No. 381 of March 15 with parts of special report No. 25 of Commercial Attaché of March 16.53

Therefore though Embassy and Consul General have sent much comment and information on current trend from time to time, the Department feels serious need of comprehensive and thorough report on the whole subject drawing upon the official records. This report ought to enable the Government to weigh the whole question of equity in past treatment and to shape its future policy.

You are therefore instructed in cooperation with the Consul General to prepare a report giving among other matters the following:

The amount of exchange made available to the Brazilian authorities during the last quarter of 1933 and the first quarter of 1934.
The total amount of exchange allotted by the Brazilian control authorities during the same period divided by countries.
The total amounts allotted during the same period, or such other period as the available material covers, according to the different purposes; for example, (a) payment for current imports, (b) unfreezing overdue trade obligations, (c) remittances by foreign-owned enterprises within Brazil, (d) payments on the bonded debt, (e) others.
The situation regarding the frozen credits which were converted by agreement with the Council on Inter-American Relations, and the discharge of the Brazilian Government’s obligations thereunder.
The present situation regarding the reported “backlog” of payments for commercial transactions, including comments as to whether this is growing or declining. This should also indicate whether this “backlog” arises mainly from current imports or from other sources.
The principles now being followed by the exchange control in allocating exchange.
Existence of special exchange agreements between the Brazilian Government and other governments, including details of terms and of operations.
Amount remitted by countries over past two years as service, including amortization, on coffee loans of various kinds.
Recommendations on policies to be pursued by this Government.

You are requested to supplement the preceding by all other pertinent information which will enable the Department to appraise the whole question and to formulate policy.

It is realized that this extensive investigation may require time but you are requested to push forward with all possible expedition. The Brazilian delegation in Washington last year expressed willingness of their Government to furnish material of the type required and if necessary you are authorized to make formal request for such information. Please cable department a summary of results as soon as available.

[Page 584]

Upon request Department of Commerce circular instruction being sent consuls at São Paulo, Porto Alegre, Pernambuco, Victoria and Bahia asking detailed report various phases existing exchange and remittance situation. Copy should go to Consulate General for in corporation in main report.

  1. Neither printed.