The Secretary of State to the Ambassador in Brazil ( Gibson )
142. The estimates of our deferred credits in Brazil given in Williams’ report transmitted with your despatch No. 331 of July 20 vary greatly.64 It would be helpful in our discussions with Aranha if you would cable any estimate you can make at this time, presumably after consultation with Souza Dantas, of the amount of (1) American and (2) the total of all deferred credits in Brazil. Also please endeavor to ascertain (1) the sum total of American and all other applications for official exchange which have been approved by the Exchange Control and await allotments of official exchange; (2) an estimate of the amount of pending applications for which approval is expected later to be given; (3) the total amount of official exchange, after deducting that allocated for the various governmental needs, which was allotted during the past full year for private remittance to (a) the United States and (b) to all countries. Also please report whether there has been any lessening in the last 6 months of the delay with which official exchange has been made available.
It is the Department’s understanding that, since the establishment of the free market, there are no funds whose transfer is absolutely prohibited and that the greater part of the present accumulation of deferred credits is represented by the backlog of funds awaiting and entitled to conversion at the official rate.
Is there also any accumulation of funds, such as interest on direct investments in Brazil, not entitled under the regulations to official exchange, which are held in Brazil for any reason, such as that an attempt to pass them rapidly through the free exchange market would result in too greatly depressing the exchange rate of the milreis?