832.5151/790: Telegram

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

10. Department’s 8, January 9, 7 p.m. Apparent discrepancy is, I believe, explained by the fact that the two estimates deal with different situations (1) that of the Minister of Finance was not in reality an estimate but a statement from the Bank of Brazil as to the actual amounts deposited in milreis in order to qualify for inclusion in any Congelados agreement; (2) the amount indicated by Thomas apparently refers to all sums now awaiting exchange in Brazil. The American [Page 286] oil companies which have thus far played a lone hand and made the disposal arrangements usually on the basis of daily exchange quota, now have, according to their own estimate, approximately $20,000,000 or more, which I understand are on Thomas’ list and which would approximately account for the discrepancy. I learn from the oil companies, however, that they have not until today approached the Brazilian Government with a view to inclusion in this arrangement. As the Department is aware these companies have as a rule preferred to depend upon assurances that they would receive special and satisfactory treatment.

The Minister stated that he had received no communication from the oil companies as to why they had not seen fit to make deposits thus signifying their desire to become parties to any frozen credit agreement. He intimated, however, that he would consider issuing another notice extending the period in which deposits might be made in order to afford those and other companies another chance.

Confidentially, the oil companies are not in a position to deposit milreis for more than about $9,000,000 and will probably not figure in the settlement for much more than that sum.

Aside from the oil company situation Thomas’ estimate of $7,000,000 for inventory of unsold merchandise is regarded here as much too low.