Foreign Relations of the United States Diplomatic Papers, 1937, The American Republics, Volume V

832.51/1195: Telegram

The Acting Secretary of State to the Ambassador in Brazil (Gaffery)

Washington, November 11, 1937—2 p.m.

73. Your 148, November 10, 6 p.m.⁴³ Press despatches report the President of Brazil as stating without qualification that it will be necessary to suspend payment on Brazilian foreign debts. Such suspension will undoubtedly produce a severe shock to Brazil’s credit standing and wide complaint from bondholders, who are always mindful of the credit balance in Brazil’s trade with the United States.

The Department does not understand how the situation could so suddenly have changed from the favorable picture given by the Minister of Finance in Washington a few months ago to “the lack of foreign exchange” which he now mentions. Please discuss this with the Minister of Finance, ask for more detailed information, and urge the importance of promptness in clarifying the situation and renewing payments.

Welles

43. Not printed.