832.5151/467: Telegram

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

333. I assume my 331, December 5, 4 p.m. which crossed the Department’s 179, December 5, 6 p.m., substantially answers the latter. I may add, however, that, as I understand it, it has for a long time been the aim of the Director of Exchange Control and other high Brazilian officials including the Minister of Finance to work towards a distribution of exchange which would not only be more in harmony with the practical equities of Brazil’s foreign trade situation but also with what these same authorities consider Brazil’s proper fundamental policy. There appears to have been a growing realization of the inequity of denoting so much of our dollar exchange to sterling requirements and a determination to put an end to it as soon as possible.

Your assumption as to the service of external bonds is correct.