832.51/1714: Telegram

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

54. My 45, January 31, 1 p.m. Aranha has observed to me several times recently that one of the chief drawbacks to a solution to the debt controversy is that the British and French have definitely declared that their bondholders council will publicly announce that they are satisfied with the plan of paying 50% of the Aranha plan beginning with the first year of the plan while our bondholders council is unwilling to do anything of the kind in connection with the plan for payments based on the last year of the plan (they also have in mind our council’s remarks about “mock dry” [mockery] last summer and fear possible future repetition) and the Department of State is willing to say only that it is a step in the right direction.

I have of course explained all the circumstances to Aranha and he is to talk to the President on the subject at Petropolis tomorrow.