811.51/4188: Telegram

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

1707. Department’s circular May 18, 4 p.m. Bank of Brazil at the request of Embassy and with approval of Minister of Finance48 has issued regulations effective immediately and has instructed its agencies to give them wide publicity.

Regulations provide:

Suspend authorization of banking institutions and exchange houses to buy or sell American bank notes.
Designate the Bank of Brazil as sole importer and exporter of American notes. The only exception to this is that persons arriving in Brazil from the United States may within 15 days sell American currency to the Bank of Brazil for milreis up to a total of $100.
Require all holders of American currency to deposit same with Bank of Brazil or its agencies by May 22 if resident in the Federal District, State of Rio de Janeiro or São Paulo, and by May 25 in case of residents elsewhere in Brazil.
Deposit to be accompanied by registration statement of name, address and nationality of owner and years of residence in Brazil, country of origin of notes, name and address of person from whom declarant acquired notes and previous owners to extent known.
Registration statements are to be forwarded by agencies to central office of bank together with a report on veracity, antecedents and political sympathies of declarants.
Central office will subsequently on the basis of decisions in individual cases either (a) reimburse owners in milreis for dollar notes deposited or (b) subject deposit to control under Decree Laws 3911 and 4166 or (c) return to bearer.

The decisions as to point 6 will be made after administrative review with Embassy of the registration statements. Procedure (a) will be followed in cases in which holdings appear to be bona fide with no Axis interests. Procedure (b) will be used in the case of holdings by Axis nationals and procedure (c) will be used in cases of Brazilian[s] or nationals whose connections are dubious or whose explanations of circumstances of holding notes are not satisfactory. Under (c) a record will be made of the serial numbers of the notes before being returned to owner in order to prevent their subsequent sale to the bank through other parties; copies of these records will be forwarded by the Embassy to the Department.

It is believed that this registration will effectively meet the problem inasmuch as offerings of currency subsequent to May 25 will be subjected to the presumption of contraband. It is of course a corollary to this program that the Treasury Department will refuse to license importation of currency from Brazil other than those made for account of Bank of Brazil except shipments which left this country before May 19.

This further evidence of prompt and effective cooperation of the Minister of Finance and the Bank of Brazil merits in my opinion a telegram of appreciation from the Department.

  1. Arthur de Souza Costa.