832.51/862: Telegram

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

15. In amplification of my No. 6, January 9, 3 p.m., transmitting message for Clark to Bondholders Council.80

I have not participated in or had any connection with Clark’s negotiations, but he has kept me fully advised.

To date he has had a measure of success which far exceeded our hopes and there was every prospect that a decree granting the essentials of what we desired would be signed by the President today in spite of pressure being applied by influential British banking interests.

However, the situation has been thoroughly messed up to the detriment [Page 617]of our interests by the receipt by Clark of a telegram in plain language from the Bondholders Committee81 proposing radical changes not in harmony with original instructions, on soundness of which Clark’s success has thus far been based.

In view of the fact that this negotiation involves the most important American interests in Brazil, I feel impelled to inject myself into the situation to the extent of pointing out that under the existing censorship telegrams of this character in clear language go directly to the Government officials with whom Clark is negotiating, and presumably also into the hands of the British banking representatives who are doing their best to prevent signature of decree.

If Bondholders Council’s views can be conveyed confidentially through the Embassy to Clark he may still secure signature in spite of the blunder which has been committed but if this sort of instructions continue to arrive in plain language undermining Clark’s position with the Brazilian negotiators, there is little prospect of successful conclusion of negotiations.

  1. The message was actually transmitted in telegram No. 7, January 10, 5 p.m., from the Ambassador in Brazil, p. 608.
  2. See telegram No. 6, January 24, 9:17 p.m., to the Ambassador in Brazil, p. 614.