832.5151/1391: Telegram

The Ambassador in Brazil (Caffery) to the Secretary of State

171. My 160, May 13, 1 p.m., Department’s 94, May 22, 4 p.m. The Embassy has finally been able to persuade the Director of Exchange that the Bank of Brazil should not collect the discount of 0.6 per cent (six tenths of 1 per cent) in liquidating deposits for payment of merchandise of American origin made from February 19 to April 8 inclusive for which exchange contracts have not been granted. This decision which becomes effective at once applies to all deposits whether for collections, open accounts or daily quotas. The Bank has instructed its agencies in Brazil to liquidate promptly all of these obligations. This ruling does not affect the payment of exchange contracts already allocated which the Bank is now paying subject to an interest charge corresponding to 3.6% per annum.

Please request the Export-Import Bank to notify the 12 participating banks of this decision and the Department of Commerce to advise exporters through its district offices.