832.5151/465: Telegram

The Chargé in Brazil (Gordon) to the Secretary of State

330. Following circular letter was last night sent by Exchange Control Office of the Bank of Brazil to all banks operating in this country.

“Taking into consideration that cover available at official rates arises exclusively from coffee exportation, the distribution of such cover shall be made in proportion to the contribution of every country in creating such cover.

Consequently the daily quotas allocated in cover of bills received for collections in foreign currencies shall be applied as follows as from December 10th next: 46 percent in payment of imports from United States, 13 percent France, 5 percent Holland, 5 percent Italy, 4 percent Sweden, 3 percent Switzerland, 3 percent Belgium, 2 percent Argentina, 1½ percent Denmark, 1½ percent Portugal. The remaining 15 percent shall be applied to the payment of importations proceeding from countries not mentioned above and shall be apportioned under the existing method for distribution of cover.

Importations originating from countries where Brazilian accounts are blocked may only be paid in the currency of those countries.

The numbering, of requests for exchange shall be made as from the 10th of December separately for the importations of each country, that is by origin, the present classification by category being hereby abolished.

The banks may only use their daily quotas in conformity with the application tables indicated above.”

[Page 600]

Souza Dantas informed me that he estimated that in this manner the entire American backlog would be automatically liquidated within 1 year.

Department’s 178, December 4, 1 p.m. received since foregoing was dictated [omission?] is answered thereby.