832.51/970: Telegram

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

11. My 6, January 7, 2 p.m. I had further long conversation with Foreign Minister this afternoon during which I asked him exactly what course the Brazilian Government was instructing the Minister of Finance to pursue upon his arrival in the United States: was he to negotiate with the bondholders for a modification of the debt plan or was he to seek a credit and would his negotiations imply or tend toward the abrogation of the December 3 exchange allocation regulations of the Bank of Brazil.

The Foreign Minister stated that no concrete program had been or would be drawn up; that the Finance Minister would have full powers to discuss with you the whole Brazilian economic and financial situation and to consult with you as to the course Brazil should follow under existing conditions; the answer to the three questions above set forth would depend entirely on the course of the discussions with the State Department.

I reminded the Minister that no one in authority had yet been able to give me figures and facts explaining the alleged shortage of exchange which had brought about the difficulties in the operation of the debt plan and occasioned the sending of this financial delegation to the United States and afterwards to Europe, and pointed out that practically the first thing the delegation would have to do upon arrival would be to clarify this question with definite supporting data. The Minister agreed, but thought that in view of the haste which had characterized the last few days it was understandable that neither the Bank of Brazil nor the Minister of Finance should have been able to give this Embassy the desired material; he hoped, however, that during the 2 weeks’ trip the delegation would be able to whip its material into proper shape for your digestion.

The Minister said that he thought he had succeeded in quieting the main opposition here to the tariff concessions requested by us, and in his view there should now be no real difficulty in concluding the treaty.34

Gordon
  1. The trade agreement was accompanied by an exchange of notes which contained a stipulation in regard to payments on bonds; for texts, see pp. 340341.