632.6531/30: Telegram

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

[Extract]

106. For the Ambassador from Welles. …

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…As reported to you in my cable 101, July 20, 8 p.m., I conferred with Aranha on July 20 and informed him of the disquiet which would naturally be occasioned this Government if the Brazilian Government entered into further compensation or clearing agreements which would have the effect inevitably of restricting trade between Brazil and the United States. I reiterated what I had said frequently before, namely, that the moral support which Brazil had given to the United States in carrying out its program for the liberalization of world trade had been of recognized value, but that if public opinion in the United States saw that notwithstanding the terms of the trade agreement entered into between the two countries, Brazil was embarking upon a policy of compensation and clearing agreements with other countries which necessarily would have a prejudicial effect upon the stimulation of the movement of goods between our two countries which had been justly anticipated as a result of the trade agreement, and that no apparent benefits were being derived for United States trade with Brazil, such a situation would inevitably lend aid and comfort to that portion of public opinion in the United States which vigorously opposed a liberal trade policy on the part of this Government. It is only from this general statement that any implications could have been drawn which would correspond even remotely to the numbered alleged threats reported in your telegram. It is hardly necessary to add that no such threats as those alleged were made.

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  • [Welles]
  • Hull