The Secretary of State to the Ambassador in Brazil (Caffery)
1718. Your 2220, June 24, 5 p.m.,61 and your 2260, June 27, 3 p.m. The Brazilian procedure for administering currency controls and the political considerations involved in securing the adoption of the Treasury procedure have been explained to the Treasury Department. As a result the following procedure has been agreed to by Treasury, which the Department and Treasury hope will be satisfactory:
- Treasury will accept all dollars already deposited, which have been or in the future may be converted into milreis, provided the dollars are accompanied by a certificate from the Embassy or Consulate when shipped to the United States. It is assumed that Treasury will be requested to accept such dollars only with respect to those [Page 805]deposits which have been or may be found to be satisfactory. The deposits by the French and Spanish Embassies should not be liquidated without prior consultation with the Department and Treasury and it is assumed that you will follow a similar procedure with respect to any other unusually large deposits where suspicious circumstances are involved.
- With respect to deposits objectionable as to person or source and deposits by European refugees who are friendly but subject to Axis pressure because of home ties, it is assumed that the depositor will be given the option of transfer to a special account in the United States or deposit in a special blocked dollar account in the Bank of Brazil as outlined in your 1975, June 10, 9 p.m. Should such deposits be placed in a blocked dollar account in the Bank of Brazil, it is understood that you will permit withdrawals from such accounts only up to the sum of $500, said withdrawals to be in milreis and to be permitted only in cases where funds are necessary for subsistence purposes and only after agreement by the depositor to permit the Bank of Brazil to send the balance to the United States on a collection basis.
- With respect to future deposits by such persons as recently arrived American tourists, Army and Navy personnel, merchant seamen, ferry command personnel, et cetera, Treasury is prepared to accept reasonable amounts of dollars converted into milreis with the approval of the Embassy or the Consulate.
- With respect to all other future deposits, it is assumed that there will be no difficulty in following the Treasury procedure of having all such deposits forwarded to the United States on a collection basis in the manner outlined in the Department’s 1597, June 10 , 9  p.m.
- Not printed.↩