632.6231/284: Telegram

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

14. Your 17, January 27. Please ask the Brazilian Government at once if it has secured from the German Government a definitive understanding that paragraph numbered 7 of the draft note submitted by the German Ambassador is intended to cover subsidies extended to German products by the German export subsidy organization organized by German business under the direction and order of the German [Page 386] Government. Obviously, since, according to our understanding this is the chief agency of subsidy, if its payments are not included the German undertaking would have little meaning in the way of assurance to American exporters against the necessity of having to meet the inequitable competition which we have brought to the attention of the Brazilian Government.

The other features of the draft note are being studied and further comment will be transmitted.

How do the specified quantities of Brazilian products mentioned in numbered paragraph 3 compare with actual Brazilian exports of these commodities to Germany during 1936 and 1937?