832.24/258: Telegram

The Secretary of State to the Chargé in Brazil ( Burdett )

408. From the Under Secretary. Please see Aranha immediately and give him the following personal message from me:

I was very deeply concerned to learn that the British had stopped and detained the Siqueira Campos in the face of all the efforts that have been made by our two Governments. Within the last few days, Caffery and I had fully explained to the British Chargé d’Affaires here the circumstances surrounding the purchase of the arms and all of the reasons that counseled the desirability of permitting the ship to proceed to Brazil. We could not have been more emphatic or more precise in our views.

Lord Lothian, the British Ambassador, returned yesterday. I will speak with him most directly and vigorously today, or tomorrow at the latest, in the expectation that he will understand the importance [Page 630] of permitting the ship to proceed and will accordingly urge this view upon his Government.

In addition General Marshall64 is speaking today with Sir Walter Layton, who has come to Washington on a special mission for the British Government, pointing out that from the standpoint of assisting Brazil to repel any aggression it is essential that these supplies be permitted to reach Brazil in order to make usable the equipment already furnished.

I have just received from the British Chargé d’Affaires a statement setting forth the opinion of his Government. His memorandum contains a number of inconsequential arguments which it is hardly worth cabling. For instance, that the arrival of the shipment in Brazil “would provide a golden opportunity for the German propagandists to claim that the British blockade had collapsed” and that the delivery of the arms “would strengthen the pro-German element” in the Brazilian Army. The memorandum’s principal points may be summarized as follows:

Between the outbreak of war and the putting into force at the end of November, 1939, of the Reprisals Order in Council to control German exports, two shipments of German arms were made to Brazil. In April last exemption was granted by the British authorities for a large shipment of 48 artillery cars, 6 anti-aircraft batteries, ammunition plant and machinery for reserves. Although the ship carrying this consignment had sailed from Genoa without an export pass and was found at Gibraltar to be carrying additional quantities of German goods not covered by the exemption, in June another larger shipment was allowed including anti-aircraft gun barrels and shells, field guns, ammunition wagons, sound detectors, etc. As a condition of grant of exemption the Counsellor of the Brazilian Embassy in London undertook that no further applications for similar concessions would be made for the duration of the war and that the Embassy would recommend the dismissal of German technicians in certain key posts in Brazil.

It will thus be seen that the Brazilian Government have in fact been treated with every consideration by the British Government and have been granted special exemption from the terms of the Reprisals Order in Council in respect of two large shipments of arms from Germany. Furthermore, despite the Brazilian Embassy’s undertaking to the contrary, further applications for similar exemption were made on July 29th, September 2nd, September 12th and October 14th. Now, although no exemption has been granted the goods have been loaded on a Brazilian vessel which sailed from Lisbon on November 19th without ship’s navicert.

Brazil would, no doubt, shortly ask for further concessions, and many similar applications which it would be difficult to refuse would, no doubt, be put forward by other South American countries. In spite of repeated requests the Brazilian Government has never produced for the British Government any documentary evidence that the arms now in question have been paid for, although, if this was [Page 631] the case, there should be no difficulty in proving it. Furthermore, the total amount of the order has been stated at one time to be 6 million pounds sterling and upon another 2 million pounds sterling. The Counsellor of the Brazilian Embassy in London has admitted that the payments in advance were simply deposits on the whole order and that payments in full for specific items have not been made. According to the information available in London, Brazil is heavily indebted to Germany in the clearing arrangement so that no question of using blocked marks arises. In fact, the delivering of the arms would merely serve to increase the Brazilian currency resources at the disposal of Germany which might well be used for subversive activities in this continent. End of résumé of memorandum.

Until this matter is satisfactorily settled, I will take every opportunity of keeping it before Lord Lothian. For future discussions with him I would appreciate having Aranha’s comment on the British statement. It would be particularly helpful to know whether the British could be assured that this is the last shipment for which an exception [exemption?] will be requested, and whether the payment for this shipment has already been made, and if not, whether it could be deferred until after the war is over, or deposited in escrow in Brazil.

  • [Welles]
  • Hull
  1. Gen. George C. Marshall, Chief of Staff, United States Army.