832.51/1252: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
98. Please keep the Department informed by telegraph regarding developments in the dollar bond situation, including the work of the conferences reported to have started on December 20 with representatives of the states for the purpose of studying “debt coordination and ways and means to meet payments.” Press despatches on latter suggest that Brazil is contemplating certain radical changes in debt servicing procedure.
The Department also desires that you continue to use your best efforts towards impressing the Brazilian Government with the great importance of initiating negotiations with representatives of the American bondholders without delay, and you are requested to emphasize this in such conversations as you may have with Aranha. Immediate and tangible progress in the matter and the earliest possible real assurance of a disposition to make some reasonable offer should be very helpful to Brazil’s general reputation and credit standing in this country; delay and uncertainty are correspondingly harmful.