832.51/1746: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
56. The Council has telegraphed to the Department the following comment on the possible Brazilian debt offer:
“Council’s statement to be published when offer is made, assuming that offer, text of which we have not yet received, is as we understand it from Department’s verbal statements, as follows:
‘Without passing in any way on the merits of the Brazilian proposal, which was not negotiated by it, the Council limits its comment on the proposal of the Brazilian Government received through the Department of State to the remark that pursuant to consultation with the Department of State negotiations at present would seem to hold no favorable prospect of obtaining any better offer. The Council must leave to bondholders to determine whether or not they will accept what is now offered.’
“It is further understood that the offer will disclose to the bondholders the whole picture including any repatriation of bonds and that should there be modifications of the present offer the Council reserves the right to review the situation anew with full liberty of action with respect thereto.”
You are authorized to communicate this to the Brazilian authorities.