832.51/1197: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
78. Your 155, November 12, 2 p.m. Continue to impress on the Brazilian authorities the very serious nature of the reaction to debt suspension. London suspended all trading in Brazilian loans, Paris bourse took no official action but there were actual dealings in only one issue, with no bids in others, New York quotations shrunk nearly 30 percent. It would be most regrettable if these reactions to the first announcement should be allowed to harden into permanent adverse opinion in the great financial markets of the world and in the wider circles of the general public. The Brazilian action is also important as a regression from the general movement of recovery and stabilization of international financial relationships. You should urge the promptest possible consideration of this question with a view to doing whatever can be done to lessen the regrettable effects of the new default and to repair the damage already done.