632.6231/317: Telegram

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

144. My 143, June 15, midnight [noon]. In order to counteract the efforts of the Germans to keep the Bank of Brazil in a heavily overbought position in compensation marks and in its determination to reduce the trade in compensation marks, the Bank decided today to suspend the crossing of the compensation marks with the dollar or other foreign exchange. Until further notice the Bank will establish arbitrarily daily buying and selling rates for compensation marks. Today’s selling rate of milreis 5.920 is higher than at any time since August 1935 when the compensation mark was first quoted separately on the exchange market. The Bank has widened the spread between the buying and selling rates to 320 reis compared to 200 reis previously.

Please inform Department of Commerce.