832.51/1211: Telegram

The Ambassador in Brazil (Caffery) to the Secretary of State

168. Referring to Department’s 81 November 17, 4 p.m. and to my 167 November 17, 8 p.m. The confused situation regarding the intentions of the Brazilian Government as regards the debt situation arises from the fact that, although the President announced in his speech of November 10 his intention to suspend debt payments (in effect offering the nation 45 millions a year), my efforts were successful in persuading him to change his policy, at least to the extent of authorizing the December payments, thereby preventing an immediate interruption of the debt service. It is obviously difficult for him, in the face of his original statement, to make a public announcement at the present time indicating so early a change of policy. In fact from conversations I am convinced that the Government itself has not yet decided upon a definite line of action. Obviously at some date in the near future an announcement will have to be made to clarify the situation and I will not fail to continue to urge this necessity in the proper quarters.

Caffery