632.6231/67: Telegram

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

148. In conversation this morning Macedo stated that throughout the negotiations he had never been clear in his own mind as to what the upshot of the whole thing was going to be. I felt that he was rushed off his feet by the combined pressure of Germany and the Sao Paulo cotton interests. He allowed me to gather that it was not until he received the clear statement of your views that he saw matters in their true light and realized for the first time the impossibility of reconciling Brazil’s liberal commercial policy and the demands of a country with directed economy.

As the Department will understand the abandonment of the German negotiations has left Macedo in a difficult position. He has, however, accepted the situation with good grace. I think it important for him to realize that there is no disposition on our part to rub it in and I therefore hope you will feel disposed to send him a friendly message of appreciation for the way he has responded to your friendly representations.