The Secretary of State to the Ambassador in Brazil (Caffery)
94. The Export-Import Bank has informed the Department that the Bank of Brazil proposes to charge six-tenths of 1 percent to American exporters who receive immediate payment of their claims.[Page 396]
This has disturbed the Export-Import Bank inasmuch as it was not contemplated at the time the credit was arranged that such charges would be made. After full consideration, however, the Bank has concluded that no complaint should be lodged with the Bank of Brazil on this ground. You may, however, when appropriate occasion presents itself, indicate informally to officials of the Bank and of the Government the disappointment of the Export-Import Bank.
For your information the basis of the Bank’s decision not to make any complaint is that the six-tenths of 1 percent for 60 days is equivalent to 36/10 percent per annum, which is what it costs the Bank of Brazil to make the cash immediately available. In addition, the funds now advanced will go to shippers who made sales with the full knowledge that exchange was being provided upon a delayed basis and who undoubtedly made provision therefor in their prices.