832.796/253: Telegram

The Secretary of State to the Ambassador in Brazil (Caffery)

5. Department’s 418, November 30, 5 p.m.41 Your 634, December 5, 5 p.m.42 The Department has very carefully considered a program for Vasp43 and is prepared to go ahead with the following plan which it believes will make possible the maintenance and extension of Vasp’s services; the nationalization of the domestic company and the removal of any possible threat by Vasp to Brazilian and Hemisphere defense. You are authorized to discuss the plan with Aranha44 who, it is hoped, will find it good and will take it up with President Vargas to obtain his approval. Any suggestions on their part will of course be welcome. It should be emphasized that the utmost secrecy is indispensable as experience has clearly demonstrated that opposing interests are quick to take advantage of any intelligence of this kind which they can pick up.

In return for the elimination of German influence and control in Vasp, this Government would take the necessary steps to obtain prompt release of equipment for Vasp, which we have reason to believe can be effected, despite the heavy demands of our armed forces.
The lending agencies of this Government would undertake such financing of the equipment as may be necessary and desirable.
This financing would take the form of a credit either to the State of São Paulo (with the usual Bank of Brazil guarantee) or to the American air carrier lending its technical assistance to replace that now furnished by German interests.
The technical assistance would not necessarily take the form of a management contract but should be of a nature effectively to eliminate permanently whatever German influence and control are now exercised. This could be worked out jointly with the State and City [Page 515] of São Paulo, et cetera, and the Vasp company, following any suggestions which Aranha might offer.

. . . . . . .

This Government has reason to believe that it can arrange with the American air carrier providing the technical assistance, for the increase and extension of the services, and that it can furthermore obtain assurances that Brazilian flight and ground personnel will be trained to supplant as rapidly as possible any non-Brazilian personnel which it might be necessary to use temporarily.

If this plan is agreeable in principle to the appropriate authorities, the Department plans to call in the representatives of Pan American Airways and American Export Airlines, which are the two companies at present certified by the Civil Aeronautics Board as foreign air carriers, and to make arrangements with the one which appears to be the more suitable for putting the plan into effect and satisfying Brazilian aspirations. In this connection you might wish to ascertain which of the two firms the Brazilian Government would prefer (see memorandum of November 16,45 conversation between Ambassador Caffery and Dudley Wood46).

In view of the Department’s experience with somewhat similar problems in Colombia47 and Ecuador,48 it is essential that the basis of a plan be worked out between the two Governments before the carriers are in any way consulted or apprised in the matter.

With particular reference to the last paragraph of your 634, the Civil Aeronautics Board will, it is understood, give sympathetic consideration to the detail of a technical expert to the Embassy at the proper stage of the negotiations should a program be worked out.

  1. Ibid., p. 668.
  2. Ibid.
  3. Viacao Aerea São Paulo.
  4. Oswaldo Aranha, Brazilian Minister for Foreign Affairs.
  5. Not printed.
  6. Vice president of American Export Airlines.
  7. For correspondence concerning cooperation of the United States in the elimination of German influence from Colombian airlines, see Foreign Relations, 1940, vol. v, pp. 723 ff.
  8. See vol. vii, pp. 270 ff.