Office of the Historian

811.20 Defense (M) Brazil/4393: Telegram

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

Rio de Janeiro, May 29, 1943—5 p.m.
[Received 6:16 p.m.]

2617. For Duggan40 and Walmsley.41 Donnelly returned yesterday from a tour of the Amazon Valley where he inspected the rubber [Page 669] development program. He strongly recommends that McAshan42 be instructed to proceed to Manáos at once with broad authority to (1) reorganize the program in Manáos including RDC’s own internal organization; (2) reduce personnel; (3) curtail rubber airport development program; (4) arrange for closer cooperation with business firms in Manáos in respect to the sale and distribution of foodstuffs and the handling and distribution of crude rubber; and (5) effect closer cooperation between Banco da Borracha and merchants.

He recommends that RDC not attempt to control prices throughout the Amazon Valley but instead import and sell at cost to established merchants and dealers sufficient food supplies to insure that adequate provisions for distribution through normal trade channels.

Donnelly and the Consul at Manáos agree that Atwell now in charge of the RDC office there is competent, tactful and respected by Brazilians. They recommend that he be given ample authority under McAshan’s jurisdiction to revamp the RDC organization there. Jobson, the new American Director of Banco da Borracha, should stay in Manáos until the Bank’s problems are settled. He is well liked and and [has] a practical understanding of the problems.

Donnelly also recommends that no additional personnel be sent to Manáos or here unless requested by Atwell and that immediate steps be taken to reduce drastically the number of RDC personnel now in Manáos.

Well informed Brazilian businessmen in Manáos estimate the 1943 rubber production in the Amazon Valley at 22,000 tons of which approximately 19,000 will be reserved for Brazil. They estimate next year’s production at 30,000 tons including approximately 10 [sic] tons for Brazil.

McAshan concurs in these recommendations.

Please inform Douglas Allen at once.

Airmail report follows.

Caffery
  1. Laurence Duggan, Adviser on Political Relations.↩
  2. Walter N. Walmsley, Division of the American Republics.↩
  3. S. Maurice McAshan, a vice president of the Rubber Development Corporation (RDC).↩