561.321D1 Advisory Committee/79: Telegram
The Ambassador in Brazil ( Caffery ) to the Secretary of State
[Received 7:05 p.m.]
1622. Department’s 1045, October 29, 10 p.m. Ministry of Foreign Affairs and Dantas informed.
Embassy’s 1564, October 23, 5 p.m.24 The Brazilian Government is expected to announce shortly25 that it will make advances against cotton of the 1941–42 São Paulo crop at approximately 15 milreis per arroba (15 kilograms) on seed cotton equivalent to type 5, or at 50 milreis per arroba on type 5 lint cotton.
It is expected that the advances will be for 6 months’ periods with renewal privileges and will be subject to deductions at time of granting for interest, warehousing and insurances charges, which are equivalent to about 2 milreis 500 reis to 3 milreis per arroba on lint cotton. The advances will probably be graduated in accordance with distance from São Paulo of storage points.
No financial assistance beyond that now accorded (see Embassy’s telegram No. 601, June 6, 194124 is likely to be granted on stocks remaining from 1940–41 crop as they have now passed beyond farmers’ hands.
[Page 145]As reported in Embassy’s telegram 1564 the Government is understood to have been reluctant to engage in financing measures with respect to the new crop without some form of crop control but reluctance of merchants and other private sources of credit to finance farmers in face of uncertain export outlook for next season will apparently make foregoing assistance necessary.