832.852/46: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 1 p.m.]
4904. Department’s 3591, November 18, 8 p.m.40 President Vargas is unwilling to let us have the six ITA41 vessels for the following reasons: [Page 751]
- (1)
- They are still the property of the Lage interests42 which have not been taken over by the Brazilian Government but which are administered by an interventor named by the Government. The Brazilian Government is asking an appraisal of the Lage properties including the vessels and the Lage interests have valued the vessels at $300 per dead weight ton which is absurdly high.
- (2)
- The vessels are suitable for coastwise service and not ocean service and are indispensable to the maintenance of coastwise trade. The Maritime Commission inform us that two of the ITA ships are tied up for repairs.
At a meeting Saturday with the Brazilian Maritime Commission, at which Dr. Andrade Queiroz represented President Vargas, they offered to let us have four ships but I told them I could not even submit a proposal to Washington for less than five ships and after some discussion they agreed to turn over to us the following vessels: Pedro II, oil burner; Almirante Alexandrino, oil burner; Bage, coal; Pedro I, coal; Siqueiro Campos, coal. Four of the vessels are now in Rio de Janeiro and the Almirante Alexandrino is in Manáos.
Rose will return to Rio de Janeiro November 22 from Uruguay and will be available next week to survey the vessels, provided the proposal appeals to the Department and the War Shipping Administration. The Maritime Commission states that the Bage and Pedro I can be converted into oil burners in the United States within a few weeks.
President Vargas and other officials of the Government are concerned over the increasing need for coastwise shipping for the transportation of troops, foodstuffs and other supplies to the northeast (they are transporting them now), and they assert that in ceding the five vessels to us they will have reached the limit to which they can go without prejudicing coastwise trade. The Maritime Commission referred to the possibility of withdrawing 1 of the 23 ships included in the recent agreement for coastwise service, but I told them that it would be inadvisable to make any alterations in the agreement, and they finally accepted our point of view.
Although they have never said so in so many words, it is obvious that they will ask us to make available to them up to 40,000 tons of rails in exchange for the 5 ships.
Dr. Andrade Queiroz has put off his vacation until November 25. If possible, I would like to receive a reply from the Department before his departure because if there is any chance of reaching an agreement in principle, I might be able to arrange for the early release of the ships.