The Chargé in Brazil ( Scotten ) to the Secretary of State
Rio de Janeiro , January 24, 1939—5 p.m.
[Received 6 p.m.]
[Received 6 p.m.]
28. Department’s 20, January 20, 7 p.m.
- Official figures: $6,000,000. In addition estimated $4,500,000 for unsold stocks of United States origin. Also $2,500,000 which is an estimate of needs in excess of daily quotas over and above limits established by the bank and which companies operating on the basis of daily quotas allege represents a legitimate claim. Total $13,000,000. (The estimate given above for needs in excess of daily quotas would undoubtedly be contested by the Bank of Brazil which would claim that this amount has already been absorbed in past remittances by the companies involved.)
- The Director of Exchange is unable to answer the Department’s question. He points out that the amount of outstanding contracts which have been issued and which have not yet matured varies from day to day in accordance with maturities and new contracts issued.
- I venture to point out that the amount of the outstanding contracts appears to be relatively unimportant as regards the discussions with Aranha. If an agreement is arrived at resulting in the supply of adequate exchange for future imports, I am convinced that American exporters will not push for immediate payment of the outstanding contracts. These contracts are being liquidated promptly on maturity by the Bank of Brazil and the Embassy has no reason to fear that this practice will be discontinued.
- Although no official division along commodity lines is available,
following is an unofficial estimate of the position of the American
- Arrears of exchange for oil of United States origin for which no contracts have been issued; exclusive of stocks $735,000
- Arrears on stocks of United States origin $3,000,000
- Arrears on oil imported by American companies from countries other than the United States; exclusive of stocks $990,000
- Arrears on stocks imported by American companies from countries other than the United States $2,400,000; this figure is in addition to the $4,500,000 for unsold stocks given in (a).
Estimate of amount of earnings of American corporations in Brazil which might be transferred to the United States if exchange could be secured $10,000,000.
Complete exchange report embracing all the points covered in this telegram and expanding thereon will be sent to the Department by air mail leaving here January 28th.43
- Despatch No. 1133, January 27, not printed.↩