The Ambassador in Brazil (Gibson) to the Secretary of State
[Received 5 p.m.]
13. Department’s 11, January 11, 5 p.m. According to the British Embassy, the maturity of the British frozen credit obligations is dependent upon the total amount of British frozen credits and this amount is not as yet definitely established. Under the terms of the Anglo-Brazilian agreement transmitted with despatch No. 616 of March 28, 1935,41 the English creditors will receive annually the sum of 1,200,000 pounds sterling until the amounts due them shall have been settled with the proviso that after the termination of the 1933 Anglo-Brazilian frozen credits arrangement42 which is expected to take place in June, 1938 they will receive 2,053,000 pounds sterling annually. Present estimates as to the total amount of the British frozen credits thus to be paid off are necessarily provisional and it can only be said that prospects are believed to be for a settlement in approximately 4 years and 6 months.
Confidentially, I am inclined to believe that if the American small creditors receive no cash payment and do not receive in excess of $2,000,000 in 120 or 150 day drafts, there will be little likelihood of protests from British sources if the remaining American creditors should receive payment through a set of notes to run 48 months. Assurance on this point could only be secured at London through consultations with the British Board of Trade and perhaps with Rothschilds.
Have appointment to see Minister of Finance tomorrow.