The Chargé in Brazil (Burdett) to the Secretary of State
[Received 6:10 p.m.]
642. For the Under Secretary. Reference Embassy’s telegram No. 636, December 6, 3 p.m. Aranha had late yesterday a telegram from his Ambassador in London saying that Lord Halifax told him he was transmitting a note through Knox and that if the Brazilian Government [Page 648] accepted the formula the Siqueira Campos would be freed at once.
Aranha informed me last night that the British formula had been received. Knox yesterday handed him the note, as quoted in your telegram December 6, 3 p.m.76 The note was not telegraphed to the Department as your telegram was received here early this morning.
Aranha said today that England is trying to throw Brazil into the arms of Germany. He and President Vargas would like to request the counsel and advice of the American Government. He considers the formula unreasonable but feels that the British have tempered their demands because of the Department’s support.
Aranha first thought the terms were an affront and impertinent in tone but says that upon careful study they are more reasonable than they seemed at first. He will deliver a formal reply to Knox in a day or two. He emphasizes that he does not wish to take any steps without fully discussing the matter with the United States. He states that he will assure the British that he will discuss the formula with all good will.
With relation to the several points in the British proposal, Aranha orally told Knox this morning in a preliminary way that he would show him the records now at the Bank of Brazil of the payments to Germany on the arms account. (Aranha told me at noon that the Commercial Counselor of the British Embassy had immediately called at the Bank of Brazil and inspected these accounts and found them as made, according to the Brazilian assertions.)
Aranha further told Knox that he would agree to paragraph 1 of the proposal as quoted in your telegram No. 426 of December 6, 3 p.m. That paragraph 2 and the paragraph regarding charters could be considered if the British would consent to the Brazilians buying some 15 Danish, Norwegian and Dutch ships now in Brazilian ports. In return Brazil would authorize charter by the British Ministry of Shipping of an equal amount of tonnage of Brazilian ships.
Aranha told Knox regarding immobilizing enemy ships in Brazilian ports, and Italian transocean service, that these questions must be discussed by Brazil with the other American Republics in accord with the principles of continental neutrality.
In addition he told Knox that he cannot reply to all these points without first conferring with the other American Republics and especially with the United States. He requested that the ship be freed immediately and he promised to confer with the other countries of the Americas in an endeavor to satisfy the British demands.[Page 649]
He requested me to advise the Department that Ambassador Martins77 is sailing for New York December 11.