Foreign Relations of the United States Diplomatic Papers, 1935, The American Republics, Volume IV

Executive Agreement Series No. 82

611.3231/961

The Brazilian Ambassador (Aranha) to the Secretary of State

[Translation]

No. 11

Washington, February 2, 1935.

Mr. Secretary of State: Animated with the purpose of making article VI of the trade agreement between Brazil and the United States of America, signed today,⁴⁶ perfectly clear, my Government has authorized me to advise Your Excellency that, so long as there may be any need for it to maintain the present control over foreign exchange, it interprets the promise contained in the said article as follows:

I. The Bank of Brazil will furnish sufficient exchange for the payments, as they become due, for all future importations of American products into Brazil; moreover, the Bank of Brazil will provide sufficient foreign exchange for the gradual liquidation of the American commercial debts now in arrears, it being understood that the Bank of Brazil will establish a system of payment under which the amount of foreign exchange required for the purposes mentioned shall not be less than a percentage calculated in accordance with the share represented by American goods in total Brazilian imports during the past 10 years, but slightly increased in order that the purposes contemplated by the new trade agreement may be accomplished;

II. With respect to transfers of profits and dividends of American companies operating in Brazil, my Government cannot, until the situation becomes normal, do more than promise that such companies will receive treatment never less favorable than that which is enjoyed or which may be enjoyed by any foreign companies established in the country;

III. My Government suggests the cooperation of the Bank of Brazil with the “Federal Reserve Bank” of New York (or any other institution which the Government of the United States of America may indicate), in the sense of inaugurating a foreign exchange information service, affording greater knowledge of the situation of each of the two countries with relation to the other and, in this way, intensifying the exchange of products between them;

IV. If, as it hopes, the negotiations in progress for obtaining banking credits should come to a happy conclusion, the Brazilian Government will reserve from the foreign exchange at its disposal that necessary to meet the payment, to the holders of bonds of loans negotiated in the United States of America of the sums fixed by the plan of February 5, 1934, for payment of debts.

I wish to add that the Bank of Brazil will continue to meet, as hitherto, the obligations assumed in June, 1933, for the refunding of the deferred commercial debts in arrears existing at that time.⁴⁷

I avail myself [etc.]

Oswaldo Aranha

46. Executive Agreement Series No. 82.
47. See Foreign Relations, 1933, vol. v, pp. 30 ff.