811.20 Defense (M)/2099: Telegram

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

339. Your telegram no. 525 of May 23 has been discussed with the Federal Loan Agency. The Agency had always understood from [Page 546] the beginning of the negotiations that the work of purchasing from the Brazilian producers and of assembling and checking the various materials at concentration points, which presumably would be Brazilian ports, be carried on by the Bank of Brazil or other agency set up by the Brazilian Government. In fact the Federal Loan Agency was advised of the appointment of Mr. Filho5 to organize this department of the bank of Brazil.

The Federal Loan Agency is nevertheless willing to take over a large share of this work. It now proposes to send Mr. Leonard J. Buck to Rio de Janeiro. Mr. Buck will arrive there next Wednesday. His duties will be to buy the materials listed in no. 325 at the prices therein mentioned. He will buy only from the large wholesalers or exporters who will make deliveries at concentration points, presumably Brazilian ports. When the materials are ready for delivery, they will be received and checked by Buck and Danforth. Arrangements have already been made with the National City Bank to make payment against invoices and documents approved by Buck and Danforth. Buck will hire such experts as may be necessary to assist in all this work. This includes industrial diamond experts and such other specialists as may be required.

Since Buck will arrive Wednesday, it is believed that all the necessary arrangements can be made promptly upon his arrival to enable the issuance by the Brazilian Government of the regulations prohibiting exports except in accordance with the agreement. It seems therefore not necessary to adopt any preliminary methods such as are suggested in your telegram.

  1. Francisco Alves dos Santos Filho, Exchange Director of the Bank of Brazil.