Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume V

811.20 Defense (M) Brazil/1182: Telegram

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

Rio de Janeiro, August 31, 1942—midnight.
[Received September 1—6:18 a.m.]

3343. For Levy,⁷⁹ Cooke, Bicknell, from Hays, Micou, McAshan. Bouças Commission agreed this evening to recommend to the Minister [s] of Foreign Affairs and Finance⁸⁰ an exchange of notes between the Brazilian Foreign Office and the American Embassy Rio as follows:

• “1. Considering the Agreement of March 3, signed in Washington between Brazil and the United States, by which the American Government agreed to acquire from Brazil all of the exportable surplus of crude and manufactured rubber, and considering further that, within the spirit evidenced at the Third Conference of Foreign Ministers of the American Republics, there exists a necessity for real cooperation between all of the countries of the Americas, the Governments of Brazil and the United States resolve to establish, by mutual agreement, a system for determining the allocations for supplying tires and tubes to the nations of the Western Hemisphere;
• 2. For the purpose of taking care of the wartime requirements and having in mind the defense of the Americas, within an over-all plan of supply, the American Government, using the statistical services which it has at its disposal to determine the requirements of the American Republics, relative to tires and tubes, will propose to Brazil the allocations which Brazil should supply to the other American Republics;
• 3. On these conditions, periodically and by mutual agreement with the United States, Brazil will make known, directly, to the other interested countries the allocations fixed for each quarter;
• 4. Exportation will be made directly from exporter to importer, namely, in the normal channels of trade;
• 5. For the other rubber manufactured articles which are or may be produced in Brazil, the Governments of Brazil and the United States mutually agree to establish a place [plan?] for supplying the nations of this hemisphere following the same methods established for tires and tubes.”

We are not positive that the Minister of Foreign Relations will accept the last sentence of paragraph 2 quoted above, but the Control Commission is so recommending. May we confirm to them officially that you accept the above wording for an exchange of notes establishing the conditions governing the mechanics of the exportation of manufactured rubber products from Brazil under the main Rubber Agreement of March 3?

If so, please be prepared to cable us the allocations for the third and fourth quarters of 1942 covering tires and tubes to be supplied from Brazil to each other Western Hemisphere country, for prompt submission to the Brazilian authorities as soon as they confirm their acceptance.⁸¹

Bouças Commission has also agreed to write a separate letter confirming that Certificates of Necessity will be submitted to Rubber Reserve Rio for approval before any export permits will be granted, and Rubberrof [Rubber Reserve] Rio will have time to clear all such certificates with Washington by cable. Further, the Bouças Commission will confirm to us in that separate letter that exporters resale prices to other American countries will not be more than 10% above the price at which Rubber Reserve releases tires and tubes stocks to those exporters, both based f.o.b. steamer Brazilian ports. [Hays, Micou, McAshan.]

Caffery

79. Robert Levi, of the Board of Economic Warfare.
80. Oswaldo Aranha and Arthur de Souza Costa, respectively.
81. In telegram No. 2563, September 3, 1942, 10 p.m. (not printed), the Department transmitted the reply from the Rubber Reserve Company (811.20 Defense (M) Brazil/1182).