832.5151/1049
The Secretary of State to the Ambassador in Brazil ( Caffery )
Sir: The Department refers to your despatch no. 428 of March 1818 last transmitting a copy of a memorandum prepared by the Commercial Attaché, and copies of an exchange of correspondence between the President of the National Foreign Trade Council, Incorporated and Mr. Stephen P. Danforth, Chairman of the Exchange Committee, American Chamber of Commerce for Brazil, in regard to the exchange situation in Brazil and the possibilities of a clearing arrangement between the two countries. Reference is also made to the Department’s telegram no. 46 of March 31 stating that the Department is not willing to concur in the suggestion of the American Chamber of Commerce for Brazil of what would be, in effect, a modified compensation or clearing arrangement.
In the event that the Brazilian authorities or officers of the American Chamber of Commerce for Brazil should seek your views concerning any such private clearing arrangement as mentioned in the aforementioned letter of the President of the National Foreign Trade Council, you are requested to make clear that, although the Department is unable to state in advance what its precise position would be in the matter, any measure of a private or governmental character which seeks to earmark or impound a portion of available foreign exchange for the trade of a particular country or group is necessarily inconsistent with the principles of international commerce which were agreed upon by the American nations at the Inter-American Conference for the Maintenance of Peace at Buenos Aires in 193619 and which have formed the basis of the liberal foreign trade policy of this Government.
Very truly yours,