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

No. 258

Sir: Referring to previous reports concerning the German compensation mark situation, I have the honor to report that the Brazilian [Page 383] authorities are having a meeting this afternoon with the German Ambassador62 in order to continue their discussions regarding the signing of a new commercial agreement between Brazil and Germany. The Brazilian authorities state that the German Ambassador is unwilling to sign any undertaking in connection with “indirect subsidies”.

The German position in this matter is that Germany need not, necessarily, buy Brazilian coffee and cotton, and if Brazil interferes in the operation of the compensation mark arrangement she will buy coffee and cotton elsewhere.

As the Department is aware, Brazil is anxious to sell coffee and cotton to Germany: in fact, the Brazilian authorities see no reason why Brazil should not sell as much coffee and cotton as Germany will buy.

Respectfully yours,

Jefferson Caffery
  1. Karl Ritter.