810.20 Defense/1240a

The Under Secretary of State (Welles) to President Roosevelt12

My Dear Mr. President: Reference is made to a letter of April 22, 194113 addressed to you by the Secretaries of State, War and the Navy, presenting for your approval a program of furnishing the other American republics with a total of $400,000,000 of military and naval matériel. At that time you indicated your approval of this general program.

The Department has now worked out in consultation with the Division of Defense Aid Reports a draft text of basic agreement which would be entered into by this Government with each of the other American republics. The draft, which is enclosed, is worked out with special reference to Brazil, and it is suggested that the only changes to be incorporated in the drafts relating to the other American republics would be in respect of the financial details appropriate to each country. There is attached a table13 indicating the total amounts of matériel which it is proposed to transfer to each of the other American republics and the total amounts to be paid into the United States Treasury over a period of six years.

[Page 139]

This program is based on deliveries of matériel over a period of at least three years and payments by the other American republics into the Treasury over a period of six years. In the event that the emergency is terminated before the expiration of these periods of delivery or payment, it would probably be necessary and desirable to reconsider the program and perhaps to modify the basic agreements in accordance with the new circumstances.

If you approve the draft basic agreement and suggested schedule of payments, the Department is prepared to begin immediate negotiations with the representatives of Brazil, Colombia and eventually all of the American republics.

Faithfully yours,

Sumner Welles
[Enclosure]

Draft Text of Basic Agreement To Be Entered Into With Other American Republics14

The President of the United States of America has determined, pursuant to the Act of the Congress of the United States of America of March 11, 1941,15 that the defense of each of the American republics is vital to the defense of all, and for that reason the United States of America proposes to provide certain defense articles and defense information to the United States of Brazil.

The United States of America and the United States of Brazil do here agree to the terms and conditions on which the obligations of the United States of Brazil to the United States of America which thereby arise shall be discharged.

Article I

The United States of America and the United States of Brazil declare that in conformity with the principles set forth in the Declaration of Lima they, together with all the other American republics, are united in the defense of the Americas, determined to secure for themselves and for each other the enjoyment of their own fortunes and their own talents. To that end the defense articles hereunder are to be delivered and in that cause they shall be used. With that purpose in their minds the United States of America and the United States of Brazil make this agreement.

Article II

Should circumstances arise in which the United States of America in its own defense or in the defense of the Americas shall require defense articles or defense information which the United States of [Page 140] Brazil is in a position to supply, the United States of Brazil will make such defense articles and defense information available to the United States of America on terms similar to those expressed in this agreement.

Article III

The United States of America proposes to transfer to the United States of Brazil under the terms of this Agreement armaments and munitions of war to a total value of about $100,000,000. The United States of America proposes to begin deliveries immediately and to continue deliveries as expeditiously as practicable during the coming twelve months to an approximate total value of $15,000,000 for use by the Brazilian Army and an approximate total value of $1,000,000 for use by the Brazilian Navy.

The United States of America, however, reserves the right at any time to suspend, defer, or stop deliveries whenever in the opinion of the President of the United States of America further deliveries are not consistent with the needs of the national defense of the United States of America or the Western Hemisphere.

Article IV

Records shall be kept of all defense articles transferred under this agreement, and not less than every ninety days schedules of such defense articles shall be exchanged and reviewed.

Thereupon the United States of Brazil shall pay in dollars into the Treasury of the United States of America the total cost to the United States of America of the defense articles theretofore delivered less all payments theretofore made up to a total of $35,000,000, and the United States of Brazil shall not be required to pay more than a total of $15,000,000 before July 1, 1942, more than a total of $19,000,000 before July 1, 1943, more than a total of $23,000,000 before July 1, 1944, more than a total of $27,000,000 before July 1, 1945, or more than a total of $31,000,000 before July 1, 1946.

Article V

The United States of America and the United States of Brazil, recognizing that the measures herein provided for their common defense and united resistance to aggression are taken for the further purpose of laying the bases for a just and enduring peace, agree, since such measures cannot be effective or such a peace flourish under the burden of an excessive debt, that upon the payments above provided all fiscal obligations of the United States of Brazil hereunder shall be discharged; and for the same purpose they further agree, in conformity with the principles and program set forth in Resolution XXV on Economic and Financial Cooperation of the Second Meeting of the Ministers of Foreign Affairs of the American Republics [Page 141] at Habana, July, 1940,16 to cooperate with each other and with other nations to negotiate fair and equitable commodity agreements with respect to the products of either of them and of other nations in which marketing problems exist, and to cooperate with each other and with other nations to relieve the distress and want caused by the war wherever, and as soon as, such relief will be succor to the oppressed and not aid to the aggressor.

Article VI

The United States of Brazil undertakes that it will not, without the consent of the President of the United States of America, transfer title to or possession of any defense article or defense information transferred under this agreement, or permit its use by anyone not an officer, employee, or agent of the United States of Brazil.

Article VII

If, as a result of the transfer to the United States of Brazil of any defense article or defense information, it is necessary for the United States of Brazil to take any action or make any payment in order fully to protect, pursuant to the Act, any of the rights of any citizen of the United States of America who has patent rights in and to any such defense article or information, the United States of Brazil will do so, when so requested by the President of the United States of America.

Article VIII

The parties to this Agreement, and the officials signing this Agreement on their behalf, each for itself, himself, or themselves, represent and agree that the execution and delivery of this Agreement have in all respects been duly authorized, and that all acts, conditions, and legal formalities which should have been performed and completed prior to the making of this Agreement have been performed and completed as required by, and in conformity with, respectively, the laws of the United States of America and the United States of Brazil.

Signed in Washington in duplicate this . . . . . day of . . . . ., 1941.
On Behalf of the United States of America
__________________________________
(Title)
On Behalf of the United States of Brazil
__________________________________
(Title)
  1. This memorandum was returned to Mr. Welles with the notation: “SW OK FDR.”
  2. Not printed.
  3. Not printed.
  4. This draft was worked out with special reference to Brazil.
  5. 55 Stat. 31.
  6. For correspondence concerning this Meeting, see Foreign Relations, 1940, vol. v, pp. 180 ff.; for Resolution XXV, see Department of State Bulletin, August 24, 1940, p. 141.