832.51/1196

Memorandum by Mr. George H. Butler of the Division of the American Republics

Mr. J. Reuben Clark, of the Foreign Bondholders Protective Council, telephoned this morning while Mr. Briggs42 was out of his office and I took the call.

Mr. Clark read the text of a telegram which he is sending to President Vargas of Brazil, the substance of which is approximately as follows:

The Council has noted press comment to the effect that Brazil is to suspend service on its foreign debt, and hopes that the President will be able to state that this report is not true. The Council considers that it would be most unfortunate for the first act of a new government to be the suspension of service upon its international obligations.

Mr. Clark stated that he is sending a copy of the telegram to the Department today, and that in the covering letter is expressing the opinion that the changed political situation in Brazil will raise the question of recognition,42a and that he hopes that the Department will not accord recognition if it is true that Brazil has suspended service upon its foreign debt. Mr. Clark stated that he had telephoned to inform the Department of the foregoing because his letter could not reach Washington until tomorrow.

  1. Ellis O. Briggs, Assistant Chief, Division of the American Republics.
  2. For correspondence relating to recognition following abrogation of Brazilian Constitution and promulgation of a new one, see pp. 312 ff.