811.20 Defense (M) Brazil/335: Telegram

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

916. For Rubber Reserve. Department’s 640, March 13, 7 p.m. I have informed the Brazilian Government and the Bank of Brazil. Dr. Truda of the Bank of Brazil30 is of the opinion that the Government will expect Rubber Reserve to provide for shipping arrangements.

Dr. Truda says that the Government must promulgate a decree law establishing a single selling agency. He will discuss this and other matters with Souza Costa31 who is returning today.

Dr. Truda intends to establish buying offices at Belém and Manáos to purchase at the fixed price less a small discount for expenses of the selling agency, reselling only to established consumers within Brazil and to Rubber Reserve. He will maintain a uniform selling price for domestic and export trade. He estimates domestic consumption at a maximum of 10,000 tons annually.

Dr. Truda is in complete agreement with the provisions of paragraph 3. He says that Brazil has recently exported 165 tons to Venezuela, 20 tons to Chile, and that the Government will authorize shipment of 150 tons to Argentina which were purchased several months ago but he will not approve other requests.

He will adopt measures to prevent hoarding rubber by non-consumers.

  1. Leonardo Truda, Director of the Export-Import Section of the Bank of Brazil.
  2. Arthur de Souza Costa, Brazilian Minister of Finance, had been in Washington arranging for the purchase of defense materials.