832.796/912: Telegram

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

1599. Reference your despatch no. 750 [7506], June 2, 1942.13 Since there are several steps yet to be taken by the Brazilian Government and the Condor organization before that company could be removed from the Proclaimed List, and since there does not seem to be a great likelihood of these steps being taken immediately, the Department and the Defense Supplies Corporation are in agreement that the technicians which Duncan14 has secured, and Duncan himself, must be released for service with the War Department or other organizations directly connected with the war effort.

[Page 781]

We are hopeful, however, that when the Brazilian Government and the Condor organization take steps which would justify removal of that company from the Proclaimed List, it will be possible to find, on reasonably short notice, satisfactory technicians in this country, if they are wanted.

It probably will not be possible to hold the DC–3 airplanes, earmarked for Condor, which will be delivered to the Defense Supplies Corporation in July, but we believe that it will be possible to obtain, in replacement for these, three others from the War Department when and if Condor is removed from the Proclaimed List and it is otherwise considered advisable to sell it this equipment.

In connection with the sale of gasoline to Condor by the Brazilian Government, we cannot lose sight of the fact that a commodity, of which there is a shortage, and which is produced in the United States or abroad by United States companies, and which occupies scarce shipping space, is being diverted by the Brazilian Government to a Proclaimed List firm which we consider to be German in important respects. The Department is confident that both you and Aranha will appreciate the adverse effect of this situation upon the effectiveness of the economic warfare effort of the two Governments.

  1. See footnote 10, p. 779.
  2. Francis L. Duncan, representative of the Reconstruction Finance Corporation.