632.6231/284: Telegram

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

17. Department’s 8, January 18, 4 p.m., third sentence.64 Following further pertinent conversations with the Brazilian authorities, Aranha65 handed me a draft note addressed by the German Ambassador to the Minister for Foreign Affairs embodying a new Brazilian-German compensation arrangement which Aranha tells me his Government is prepared to accept. Points 1 and 2 of this draft are identical with points 1 and 2 in the Brazilian draft note to the German Chargé d’Affaires dated September 30th, transmitted to the Department with my despatch 108 of October 23, 1937.66 The balance of the note follows:

  • “3. For the importation into Germany of the following specified Brazilian products against payment in verrechnungs marks there will be conceded import licenses during the next 12 months up to the quantities mentioned below as and when the possibilities of compensation permit: 18,000 tons of tobacco leaf; 10,000 tons of frozen meat; 200,000 boxes of oranges; 4,000 tons of bananas; 4,000 tons of Brazil nuts.
  • 4. The Government of the Reich will give, in accordance with the compensation possibilities, during the next 12 months, licenses for the importation of the following Brazilian products: dried and salted hides, skins, wool, oil bearing seeds, rubber, vegetable oils, woods, minerals and other raw materials, cocoa, matte, honey, fruits, eggs and other Brazilian products. The provision in this paragraph, however, does not prejudice the obligation mentioned in the third paragraph.
  • 5. The distribution of import licenses for Brazilian products by the competent authorities in Germany will be made on an equitable basis.
  • 6. The concession of import licenses for the importation of Brazilian products into Germany or for the exportation of German products destined to Brazil cannot depend on any stipulation which excludes the vessels of one or the other contracting party from the transportation of the products referred to.
  • 7. The Government of the Reich, in agreement with the Brazilian Government that competition in the Brazilian market for the placing of products of foreign origin should be on an equitable basis, declares that no article of German production destined for importation into Brazil shall be the subject of subsidies of the Government of the Reich.
  • 8. In case, within 1 year, counting from the present date, the German-Brazilian commercial interchange develops in such a manner that German exports to Brazil exceed Brazilian exports to Germany, or vice versa, the Government of the Reich will communicate with the Brazilian Government in order to examine the question arising from the unilateral increase of commercial interchange between the two countries and the consequent difficulties in the liquidation of the respective payments.
  • 9. After 12 months of the present agreement have passed, the same will continue in effect; however, it may at any time be denounced by either of the two parties with previous notice of 3 months.
  • 10. If during the life of the present agreement, one of the contracting parties modifies its system of importations or of compensation which is in effect between the two countries on the date of the signature of this agreement, the two parties will open negotiations with the object of adapting the above mentioned provisions to the new situation. If the negotiations do not arrive at a satisfactory conclusion within 15 days, each one of the Governments reserve the right to denounce the present agreement upon previous notice of 15 days.”

The Department’s comments are requested by telegraph.

  1. Ante, p. 374.
  2. Oswaldo Aranha returned to Rio de Janeiro from his post as Ambassador in the United States in December 1937.
  3. Not printed.