Statement for the Press on the Decentralization Plan Issued by the Ambassador in Brazil (Caffery)60

An exchange of notes61 between the Brazilian Foreign Office and the American Embassy, established today an improved system to facilitate and expedite imports from or via the United States of the essential commodities required for Brazil’s basic economy.

The agreement aims at improving the effectiveness of the present decentralization plan, so-called because it transfers from Washington to Brazil various facilities of the Board of Economic Warfare to permit closer collaboration with Brazilian economic interests.

The agreement is part of the program of the United States Government to keep industrial production as well as shipments from the United States to Brazil and its other allies moving as smoothly as war conditions permit and to maintain, the present high peak of the industrial war effort of the United Nations.

The Brazilian Government names the Carteira de Exportação e Importação of the Bank of Brazil as the sole Brazilian agency to approve applications for commercial imports from the United States regarded as necessary to meet Brazil’s essential needs. It also names the Commercial Counselor of the Brazilian Embassy at Washington as representative of the Carteira in the United States to deal with authorities at Washington and New York.

Ambassador Caffery, commenting on the adoption of the revised plan said, “I am highly pleased with this new procedure established between our two governments in cooperation with the manufacturers and shippers of the United States and the Brazilian importers. It offers an excellent program for expediting the exportation of the essential commodities required for the maintenance of Brazil’s wartime economy.”

The notes established the mechanics designed to perfect the execution of the “decentralization plan”,62 agreed upon between the two governments recently, to determine Brazil’s requirements of materials to be imported from or via the United States. The agreement resulted from a series of negotiations between Dr. Gaston Vidigal, Director of the Carteira de Exportação e Importação, Dr. Walder Sarmanho, Commercial Counselor of the Brazilian Embassy at Washington, and [Page 151] representatives of the American Embassy and the United States Government agencies concerned, who were assisted by special experts sent from the State Department, and the Board of Economic Warfare in Washington.

Under the program the Carteira will recommend the importation of materials from the United States as well as indicate those which should be given preference as most necessary. In the event that the supplier in the United States is unable to fill the order from Brazil for a needed commodity recommended by the Bank of Brazil, Commercial Counselor Sarmanho will seek another supplier with the cooperation of the Board of Economic Warfare of the United States. Copies of all preference requests approved by the Bank of Brazil will be transmitted by the importers to their suppliers in the United States who will attach such copies to their applications for export licenses.

Following the disposition of the preference requests, the Carteira will communicate regarding any necessary subsequent action with the Commercial Counselor in the Brazilian Embassy in Washington advising the American Embassy in Rio of the action taken. This will enable the United States Government to give maximum cooperation to Brazil and at the same time assure maximum possible production of needed supplies from the North American industry and the most efficient use possible of available shipping space.

The new provisions of the decentralization plan will become effective May 12, 1943.63 The plan otherwise will continue as previously established.

  1. Copy, transmitted to the Department by the Ambassador in his despatch No. 11216, May 13; received May 21.
  2. Not printed.
  3. Decentralization Plan A; for an outline of this plan, see circular airgram of January 19, 8 p.m., p. 106.
  4. The effective date of the Agreement was indicated in the Agreement as May 1, 1943, but it was not signed until May 7 and not delivered to the Embassy until May 10.