811.20 Defense (M) Brazil/131: Telegram

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

1897. Department’s 1141, November 14 and my 1796, November 22.8 Upon receipt of Department’s telegram I obtained a commitment from the Bank of Brazil not to accept sales contracts for cobalt, tungsten and nickel ore pending negotiations. It is therefore highly desirable that we proceed with this matter without delay.

I propose to handle this through an exchange of identical notes similar to the one of May 14 (my despatch number 4635, May 199). The first paragraph will be the same as in the previous note except that the period will be December, 1941 to May 13, 1943 inclusive and an additional qualifying phrase will be added indicating that the terms include the materials in the form of alloys or concentrates as well as in ore.

The second paragraph will read the same as in the previous, with the following qualification “it being understood that shipment of the kind specified therein will be facilitated in so far as compatible with the National Defense program of the United States.”

The third paragraph will read the same subject to such maximum annual quantitative undertakings for the three commodities as the Department indicates should be included and using the term “purchasing agencies of the Government of the United States,” instead of the terms “Metals Reserve Company and Rubber Metals [sic] Reserve Company.”

The final paragraph in regard to price determination will remain the same.

Please inform me as to the Department’s final decision on quantitative limitations and views on proposed note as outlined. The question of prices can if necessary be negotiated at a later date.

  1. Latter not printed.
  2. Despatch not printed.