The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 5:53 p.m.]
156. Department’s telegram 80, May 10, 6 p.m. The Bank of Brazil has transferred to the National City Bank of Cleveland the quota of $2,000,000 originally allotted to the Guaranty Trust Company.
The Director of Exchange informs me that the difference between the revised estimate of American arrears of $26,000,000 and the total of $13,944,000 furnished by Dr. Sousa Dantas in his letter of March 8, 1939,61 to Warren Lee Pierson chiefly represents new arrears resulting from the increased lag in closing exchange for maturities and daily quotas. My opinion is that Dr. Sousa Dantas’ figures were too [Page 394] low. The Bank of Brazil is still checking the records of commercial banks in order to ascertain the true amount of American commercial arrears and the Director of Exchange is of the opinion that the final figures may be lower than $26,000,000.
The foreign dollar and sterling balances of the bank have increased correspondingly over the last 2 months, mainly because of the seasonal sale in free foreign exchange of the Sao Paulo cotton crop.
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