832.796/321a: Telegram

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

220. Two Lockheed Lodestars have been made available to Vasp for immediate delivery. Two additional Lodestars have been allocated for delivery to Vasp in the near future, probably within 3 months or less. It is understood that Vasp has made its own financing arrangements for the first two Lodestars. By the time the second two are needed it is practically certain that financing for the second two on very favorable terms and conditions will be available.

As a condition to supplying Vasp with airplanes, this Government desires a commitment that Vasp agree to sell its present equipment to it or its order. Under the financing plan now almost completed Vasp’s present equipment would be acquired on a trade in basis at prices which will be more than the prices the company would probably obtain in the market. There is no objection to Vasp’s continuing to use its present equipment subsequent to its acquisition of the first [Page 519] Lodestars and prior to a reasonable time after the acquisition of the final two.

The supply of the airplanes to Vasp is of course dependent on assurances from you that effective degermanization will simultaneously be carried out.

Please inform the president of Vasp of the foregoing. Within a few days the Department will be able to notify Vasp’s representatives in the United States where and when they can take delivery of the first two Lodestars.

Information regarding exact delivery date of planes and details of financing will be telegraphed later.