The Brazilian Minister for Foreign Affairs (Aranha) to the Secretary of State 11


Mr. Secretary of State: The Brazilian Government presents through Your Excellency, to your Government, its thanks for the courtesies which were extended to me and to my companions during my visit to your country.

Your Excellency may be assured that my grateful recollection of the period during which I had the honor of being my country’s Ambassador to the United States, and that the amity of my people towards the American people and the mutual confidence that exists between our two Governments, have been enhanced by the repercussion of the new and expressive demonstrations of cooperation and of friendship towards Brazil which we have witnessed during the course of this visit.

With a desire to foster continued mutually beneficial economic relations between Brazil and the United States and to develop the national economy and natural resources of Brazil, the Government of Brazil, after due deliberation and the considered discussion of its authorized representatives with the authorized representatives of the Government of the United States of America, is undertaking or intends to undertake in the near future the following policies and actions to attain the objectives mentioned:


It is the decision of the Government of Brazil to issue a decree-law freeing the exchange market for commercial transactions. This will ensure the provision of funds in payments for imports from the United States in accordance with the note of the Brazilian Ambassador to the Secretary of State of the United States of February 2, 1935.12 This measure will also facilitate the transfer of an equitable return upon investments made in Brazil by United States citizens under normal conditions in the Brazilian balance of international payments. The Brazilian Government will give further study to this matter. I believe that, as a result of the discussions between the authorized representatives of our respective governments during the course of my visit, a substantial accord has been reached as to the basis of these provisions and for the necessary cooperation between our institutions.

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In order to proceed with this proposed facilitation of exchange transactions, the Government of Brazil finds it necessary to provide dollar exchange to meet amounts now due American exporters. To make this provision, my Government has addressed a communication to the Export-Import Bank of Washington with a view to obtaining the extension of appropriate acceptance credits for this purpose by that organization. A copy of this communication is enclosed as Appendix A.13


The Government of Brazil has decided to create a Central Reserve Bank which will have the functions of regulating the internal and external value of the milreis, and of controlling credit and the money market. The Central Reserve Bank will endeavor to eliminate unusual fluctuations in the balance of international payments and those arising from the irregular timing of in- and out-payments by a policy of adapting the balance of payments to normal exchange resources. To this end a line of credit in American currency, intended exclusively for this purpose, would be desirable in order to ensure relative stability in the value of the milreis within the policy described. A copy of a communication addressed by my Government to the Treasury Department regarding this matter is enclosed as Appendix B.14


With particular view to the systematic economic development of the Brazilian nation, my Government, in its communication to the Export-Import Bank of Washington, a copy of which is enclosed as Appendix A, took up the question of obtaining longer term credits to finance Brazilian purchases of industrial goods in the United States, and the terms of repayment of such credits. These credits are believed to be necessary to the proper utilization within a reasonable period of the known resources of Brazil, for the benefit of the Brazilian people and the further stimulation of Brazilian-American trade.


The Government of Brazil is especially desirous of stimulating the systematic large-scale production of agricultural products native to Brazil or capable of successful introduction to Brazil which will complement production and find a market in the United States. The Government of Brazil will, of course, appreciate the cooperation of the Government of the United States in the study and development of such products which may provide the United States with assured sources of supply.

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In connection with all of the phases of economic relationships between the United States and Brazil, my Government has given renewed thought to the dollar bond indebtedness of the Government of Brazil and of the Brazilian States and Municipalities. The decision has been reached, as part of its general economic program, to resume payment on July 1, 1939 on account of interest and amortization on these external dollar debts. A transitional arrangement for a brief period to effect this has been discussed with the Foreign Bondholders Protective Council, Incorporated. These discussions in regard to the scale and amount of payment will be continued after my return to Rio de Janeiro and subsequent announcement will be made by my Government. It is the hope and expectation of my Government that with the improvement in its foreign commerce which it now foresees a permanent settlement which will be equitable and satisfactory to all interests involved will follow upon the expiration of this temporary arrangement.


Still with the desire of giving to the friendship between our two countries economic and juridical bases commensurate with the purpose of promoting cooperation between our two peoples, I wish to emphasize that my Government intends to observe a general policy which will inspire the confidence of United States investors giving them no more restrictions than those to which Brazilian investors may be subjected. I can assure Your Excellency that my Government has decided to encourage in any way and means the valuable and desirable cooperation of United States citizens who have invested or who in the future may invest their capital and technical experience in the development of Brazilian resources and national economy.

Renewing my expressions of appreciation to your Government and to all the officials of the various Departments who have given us inestimably valuable assistance during the period of our negotiations, believe me your sincere friend.

Oswaldo Akanha
  1. For a summary of the discussions between the Brazilian Minister for Foreign Affairs and American officials published as an introduction to the letters exchanged between them, see Department of State, Press Releases, March 11, 1939, pp. 174–175.
  2. Executive Agreement Series No. 82, p. 34, or 49 Stat. 3808.
  3. Department of State, Press Releases, March 11, 1939, p. 177.
  4. Ibid., p. 178.