811.20 Defense (M) Brazil/538: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
1301. In further reply to your 1576, May 9.54 Rubber Reserve is prepared to purchase all miscellaneous rubber items already manufactured [Page 704] and in process and all future items made available during the life of the Agreement of March 3 at net dealer prices now prevailing in Brazil, subject to change by mutual agreement.
In so far as practicable Agreement should provide for purchase of essential items, the production of which is permitted under the terms of W.P.B. permissive order M–15–b, as amended,55 copies of which are being sent. Wherever possible, these items should be produced in accordance with W.P.B. specifications as set forth in order M–15–b, as amended.
The agreement with Rubber Reserve should provide that Rubber Reserve Company is entitled to change the items on the list and specifications therefor with due protection to the interests of the manufacturer. Rubber Reserve will make the necessary arrangements to finance the acquisition of these items and their storage in Brazil. It is understood that this offer applies only to those manufactured goods produced within the quota fixed by agreement for Brazil’s domestic industrial consumption of crude and reclaimed rubber.
The agreement is not limited to the acquisition of essential products. This is for two reasons. In the first place we do not have here detailed information as to Brazilian production facilities for miscellaneous products, and hence cannot determine to what extent it would be feasible to manufacture items regarded here as essential. Second, we do not have detailed information as to the requirements of the other Latin American Republics for miscellaneous products. For these reasons Rubber Reserve Company is planning to send to Brazil in the very near future a representative familiar with conservation policies here who will aid in changing over to the manufacture of essential items, and we can proceed with the obtaining of the necessary information for the other Latin American Republics. In the meantime, however, Rubber Reserve Company desires to acquire all manufactured products not required for domestic consumption in Brazil.
Repeat to Lima for Allen as no. 43.