Office of the Historian

832.5151/1273: Telegram

The Chargé in Brazil (Scotten) to the Secretary of State

Rio de Janeiro, January 5, 1939—4 p.m.
[Received January 5—3:55 p.m.]

2. Following is a translation of a note from the Minister for Foreign Affairs, dated January 4, in reply to the note which I presented on December 20,39 as stated in the Embassy’s 294, December 20, 2 p.m.40

“Mr. Chargé des Affaires: I have the honor to acknowledge receipt of the note of the 20th of last month in which, referring to article 6 of the Commercial Treaty in force between the United States and Brazil41 as well as to the declarations made by the Ambassador of Brazil in Washington in a note addressed to the Secretary of State on February 2, 1936 [1935],42 you request the allocation or exchange for the payment of importations of American products, as such payments become due.

2.
In answer, I have to inform you that the Brazilian Government does not spare efforts to direct the economy of the country with the object of freeing it, as soon as possible, from the exchange monopoly which was reestablished during the second half of last year due to [Page 380] world economic conditions, thus giving again full freedom to exchange operations for commercial purposes, since it is correct that this is the only means to end complaints of foreign exporting commerce with respect to the allocation of foreign exchange.
3.
The greatest obstacle which the Government is finding at the moment to achieve this desideratum is the small delay which now exists in the payment for imported merchandise which we believe reaches 2,500,000 pounds, more or less, with the United States. In case exchange freedom is reestablished, this amount, as well as the arrears with other countries, would weigh on exchange as a depressing element.
4.
In order to remove this difficulty the Government is studying means of obtaining a credit which will permit the liquidation of these commercial arrears, over a reasonable length of time, in order thus to be able to normalize the exchange market and do away with all delay in the payment of imported merchandise, of which the foreign exporters complain.
5.
This Government is desirous of examining this possibility with your Government, thereafter assuring it of furnishing sight exchange for merchandise of current and normal commerce.

I avail myself of the opportunity to renew to Your Excellency the assurance of my very distinguished consideration. Oswaldo Aranha.”

Scotten
  1. For text, see Foreign Relations, 1938, vol. v, p. 369.↩
  2. Ibid., p. 372.↩
  3. Trade agreement signed February 2, 1935, Department of State Executive Agreement Series No. 82, or 49 Stat 3808.↩
  4. Published as part of the trade agreement.↩