811.20 Defense (M) Brazil/1908: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 11:18 p.m.]
4784. My telegram No. 2237, June 26, 4 p.m.96 Souza Costa told me yesterday that Aranha is determined to ship the 600 tons of crude rubber to Chile which he promised the Chilean Government during the Pan-American Conference here in January and which he alleges was approved by our Government; also that the Chilean Embassy here has already acquired 90 tons for prompt shipment to Chile. Costa said he had strongly opposed the proposed sale of the rubber [Page 723] to Chile on the ground that it violated the rubber agreement with the United States, but that Aranha has taken the position that it is an agreement between two governments and that he as Minister of Foreign Affairs committed the Brazilian Government and that therefore Costa as Minister of Finance has nothing to do with it.
Aranha told Souza Costa that he would resign rather than to break his agreement with Chilean Government. We are reliably informed that the Chileans have had no success in buying additional crude rubber in Brazil and that Aranha is so aroused he might even compel firms to meet the requirements of Chile. Allen and I have reviewed the situation and feel that we should obtain factual information regarding the crude rubber requirements of Chile and recent purchases of crude rubber by Chile from Bolivia and other countries. If we can clearly establish that Chile’s requirements of crude rubber taking into consideration the consumption of manufacturing equipment now available there does not exceed 100 tons annually which is Allen’s recollection, we could use this point most effectively in our discussion with Aranha and follow up with the obvious observation that the excess of 500 tons might find its way into Argentina or be exchanged for Argentine tires and tubes or other essential products. It would assist if we could assure Aranha that Chile has been given a specific assurance that their essential requirements of tires and tubes will be supplied from the United States or Brazil. These points could be used to supplement our basic contention that in the absence of any specific exception in the basic rubber agreement of March 3, 1942, that any outstanding commitments on that date on the part of Brazil were nullified.
I have no recollection of the United States Government at any time giving its express or implied approval to the reported transaction between Brazil and Chile, but I would like to have the Department’s specific assurance in this regard.
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