832.51/1496: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 2 p.m.]
209. Departments’ 121, June 30, 10 a.m. Aranha referred again this morning to the debt matter and remarked that 4 months ago no one here, Brazilian or foreign, thought he could possibly secure a payment at this time on the dollar bonds. It had been necessary to bring about a change in the President’s and the army’s entire attitude. He said that it is “the first step that counts”. Having once brought the President around, he believes that in the future the situation will continue to improve and that we will be able to secure a satisfactory settlement of our whole debt business.
The President decided yesterday afternoon to inform the Cabinet next Tuesday that he intends definitely to adopt a policy of full cooperation with the United States and for that reason is making a payment on the dollar bonds and no payments on the bonds held in the European nations. Aranha reminded me that many of the Cabinet are opposed to these payments, but he feels sure, after the President’s declaration, they will change their attitude. “I know the amount is very small,” he added “but the important thing is to implant the principle and to start the ball rolling in the right direction.”
[Page 365]Observing “in any event this is a good example for the many other countries, especially those in Latin America, who owe you money and are paying nothing.”
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