832.5151/1063: Telegram

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

51. Your No. 81. The Treasury has been consulted in regard to possible arrangement suggested by the Director of Exchange, and has suggested the following reply. For your information this is regarded as the most feasible and easily effected arrangement, though alternative arrangements may be possible.

“Please refer to letter from Secretary Morgenthau to Minister of Finance Souza Costa dated July 15, 1937 and delivered to latter on that date. Under terms of this letter20 U. S. Treasury will through Federal Reserve Bank of New York as its fiscal agent make available dollar exchange up to 60 million dollars at annual rate of interest ½ of one per cent above average Federal Reserve Bank of New York rediscount rate. At present effective rate is 1% or total cost of credit one and one-half per cent per annum. Transaction which you describe is eligible under terms of letter of July 15, 1937.”

  1. See Treasury Department press release No. 10–78, July 15, 1937, infra.