832.5151/521a: Telegram

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

20. The Department is informed by Aranha that he and the Minister for Finance have submitted to the Brazilian Government a new plan of exchange control and allocation which, if accepted, will be promulgated at once today in fact. Details of the plan were not communicated. Please cable summary of new plan, if adopted, and your views as to its effect on American interests.

The Department is considering advisability of further communication with the Brazilian Government in which it would set forth its anticipations of the exchange treatment to be given American interests in accord with the exchange of notes and under such arrangements as may be installed by the new exchange plan mentioned above. It is giving thought to the wisdom of including in such communication a direct request dealing with the deferred indebtedness due to Americans which has arisen as a direct result of the most recent suspension of exchange allocation by Brazil. Therefore it is interested in the figures given in your No. 32 of February 8, but uncertain as to their meaning. What is meant by “new” frozen credits? Can you distinguish amounts that have arisen “resulting from Banco do Brazil’s recent exchange measures” from other frozen credits? It might be both reasonable and feasible to ask the Brazilian authorities to give special consideration either to (a) the amount of new credits which entered the deferred class during the period of discussions or (b) the amount of obligations incurred for imports from this country during [Page 347] the period of discussion. Therefore figures separating these credits from all other deferred credits would be of great use. Can the figures which you transmit in your 32 be taken as throwing any light on this question?