632.6231/262: Telegram
The Secretary of State to the Ambassador in Brazil (Gaffery)
76. Department’s no. 66, November 3, and no. 72, November 11. After further consideration of the German note of October 18, the Department has difficulty in understanding the purport of the sentence reading, “Brazil, during the life of the agreement, will not take steps by which the importation of German merchandise into Brazil and the importation of Brazilian merchandise on the part of Germany on a compensation basis might be disturbed or restricted.” You are requested to discuss this provision orally with the Foreign Minister and to inquire as to its meaning, particularly with reference to the undertaking in the note of the Brazilian Ambassador to the Department dated July 14, 1937, stating that “the Brazilian Government intends that trade through compensating procedures, being susceptible of creating a situation which introduces difficulty into the trade with countries having a regime of currency of free international circulation, should be so regulated as to prevent the dislocation of trade with the countries carried out in free currencies and on the basis of equality.”