811.20 Defense (M) Brazil/4393
The Secretary of State to the Ambassador in Brazil (Gaffery)
Sir: Reference is made to your telegram 2617 of May 29, 5 p.m. regarding the visit to the Amazon of your Counselor for Economic Affairs and to his several recommendations on the rubber program.
The Department approves your general recommendations. You will be pleased to know furthermore that Mr. Douglas Allen, President [Page 670] of the Rubber Development Corporation, also shares your views and is, in fact, making use of his present stay in Washington to work out policy decisions along the lines of your telegram for adoption by the Rubber Development Corporation. These decisions will be reached in consultation with Mr. Reed Chambers43 so that, on his return to his post at Manáos, (Mr. Chambers) will be fully conversant with the guiding principles behind the policies of the rubber development and procurement program. Mr. Jeffers44 and the Chairman45 and President of the Rubber Development Corporation plan to retain Mr. Chambers, at least for the coming season.
You appreciate undoubtedly even more readily than can be appreciated in Washington that many of the difficulties and delays to which the program has been subjected have had their origin not in the Government agencies at Washington alone, but also within Brazil. The Department is deeply gratified by Mr. Allen’s recognition of these factors, with his keen political sense and with the manner in which he has conducted his negotiations and transactions in Brazil. Mr. Allen’s immediate objective will, therefore, be to formulate policies for the Rubber Development Corporation, with which the Department is in agreement, and to cause to be issued appropriate instructions to Mr. Chambers and to the other field officers.
When this objective is attained, the Rubber Development Corporation will expect Mr. McAshan, under instructions which will be issued to him, to spend a considerable amount of time in the Amazon, especially at Manáos.
With regard to the specific numbered points in your telegram, the Department is able to inform you as follows:
- (1)
- Mr. Atwell, in charge of the Amazon division in Mr. Chambers’ absence, is setting up what the Corporation hopes will be an efficient organization;
- (2)
- Mr. Atwell himself believes that personnel can be reduced and is expected to make recommendations shortly;
- (3)
- The original program for the construction of 20 airports with elaborate installations has been cut to 8 airports with modest installations. It is still possible that a further cut will be made without affecting, however, the airports the construction of which involve commitments to foreign governments (e. g., Manáos and Iquitos). Stress will be laid on greater utilization of seaplanes;
- (4)
- The relations with business firms in Manáos are being given close study. The Rubber Development Corporation hopes that instructions may shortly be issued from which satisfactory agreement Can be reached by SAVA46 with the local merchants;
- (5)
- There is reason to expect, under the present setup and personnel of the Banco da Borracha, closer cooperation with the merchants. It appears indispensable to the Rubber Development that satisfactory agreement with the merchants on prices for food and tappers’ supplies be reached for the success of the procurement program. This would not cause distribution to flow through unnatural channels. Mr. Jobson of the Rubber Bank is now in Manáos in this connection.
With regard to personnel, the Department has asked the Rubber Development Corporation to keep us informed not only of assignments, which is now being done, but also of withdrawals. Mr. Allen is in complete agreement with the view that Brazilian personnel be used to the maximum and be trained for replacement of Americans.
The Department highly commends Mr. Donnelly for his intelligent investigation of the rubber program and is looking forward with keen interest to the receipt of his air mail report.
Very truly yours,