The Ambassador in Brazil ( Gibson ) to the Secretary of State
[Received 8:10 p.m.]
284. Department’s 142, October 2, 6 p.m. Souza Dantas has given me the following estimates but wishes it to be made clear that they are approximations only in view of the fact that statistics of this nature have never been compiled by the Bank of Brazil.
- The total amount of American deferred credits in Brazil, including those covered by the Congelado Agreement of 1933, is given as $15,000,000. This does not include special arrangements with the oil companies, General Electric Company, et cetera. An estimate from another source, including all deferred credits, is $24,000,000.
- The total of all other deferred credits in Brazil is $36,000,000.
- (a) The sum total of American applications for official exchange, which have been approved by the Exchange Control and are awaiting allotments of official exchange, is $2,500,000; (b) all other applicants for official exchange, which have been approved by the Exchange Control and are awaiting allotments of official exchange, are $40,000,000. The contrast between these figures is explained by the Bank as indicating that Americans are more nearly up-to-date than other nationalities.
- Estimate of the amount of pending applications, for which approval is expected later to be given, is $10,000,000.
Impossible to judge amounts allocated during past year for private remittances to the United States and all other countries.
There appears to be a lessening in the past 6 months of the delay with which official exchange has been made available, especially in the case of American firms. Since establishment of the free exchange there are no funds whose transfer is absolutely prohibited.
Souza Dantas has requested the large buyers of exchange to make remittances slowly in order to avoid depressing the exchange rate of the milreis. The buyers of exchange are complying with Souza Dantas’ request and there has been no exodus of exchange. I have been reliably informed that within the past few months new European capital has been entering Brazil which has also been a factor in strengthening the milreis.
I have followed this question day by day since receiving the Department’s 142 in an effort to assemble dependable figures. During this time I have received full cooperation from the Bank and am convinced of the soundness of Souza Dantas’ statement that the Bank possesses no dependable statistical information. The foregoing should therefore be regarded as nothing more than a sketchy estimate.