811.20 Defense (M) Brazil/4820
Report by the Consul at Para (McLaughlin) on Changes Brought About in the Amazon Rubber Program as a Result of Recent Conferences in Washington48
You have received reports from the Embassy, the Consulates at Belém and Manáos, and from other sources indicating that the rubber [Page 672] program in Brazil as originally conceived was too large for realization; reports also to the effect that the Rubber Development Corporation has had an excess number of American employees in the Amazon and that the administration has been exceedingly poor. As a result of these and other factors, the Brazilian merchants, politicians, and Army officers have had a poor impression of the Rubber Development Corporation’s activities in the Amazon and have expressed a desire that this situation be remedied.
I am very happy to inform you that Mr. Maurice McAshan has been made Vice President of the Rubber Development Corporation and has been placed in charge of their Brazilian operations. He is responsible for the Rio de Janeiro and Amazon Divisions. Mr. McAshan is an experienced administrator and fortunately has had some two years of Brazilian experience. I feel certain that under his administration the Rubber Development Corporation will do nothing that will give our Brazilian friends cause for objection. It is contemplated that Mr. Kaiser, at present in charge of the Belém office, will be transferred to Manáos to take charge there, and he will be succeeded by either a Mr. Luigi or Davies. All three of these gentlemen have had extensive experience in South America, and considerable of their time has been spent in Brazil. Mr. Reed Chambers will continue with the RDC in an advisory capacity and will return to his insurance business in September. I believe that he does not intend to return to the Amazon. This gives Mr. McAshan a free hand to reorganize the personnel in line with the modified program.
Instead of the fantastic and impracticable objectives as originally conceived, the revamped program lays emphasis on the maximum production of rubber during 1943 and 1944. The impetus of the RDC’s activities will be beneficial in stimulating continued production during 1945 and 1946, at the end of which our formal obligations end. It is hoped that the Amazon Valley will produce 28,000 tons of rubber this year and 40,000 during 1944. A similar yield is expected for the years 1945 and 1946. In as much as Mr. Jeffers places emphasis on 1943 and 1944, it has been possible to dispense with the ambitious airport program and the housing program for the American employees. Airports will be completed at Manáos and Iquitos, and it is possible that some small amount of work will be done on the two or three others not yet determined. Commitments have been made to Brazil and Peru which must be fulfilled. A certain amount of exploratory work will be done in Mato Grosso under Dr. Tate,49 since it is felt that this area and Acre should be able to produce substantial amounts of rubber.
[Page 673]Prices have been established in accordance with the SAVA Agreement on basic foodstuffs and hardware. Merchants recognized as such by their respective merchants associations will be sold these items at the published prices less 15 percent. This appears to be a sufficient operating margin, especially considering the fact that the merchants are not required to warehouse their own supplies. It is recognized that distribution of supplies must be made through the existing commercial channels. Clarification of this point, together with the establishment of prices and the availability of supplies in the leading centers of distribution, should dispel much of the opposition of the commercial classes.
No definite arrangement has yet been worked out governing the transportation of rubber workers from Ceará. I believe that possibly by the end of this month some new agreement will have been worked out for 8,000 to 10,000 workers to be delivered by the end of the year. Not all of these men will be absorbed in rubber gathering. However, those who are not will replace local labor so engaged.
I feel that the publicity question has not yet been satisfactorily answered. As you know, the Coordinator of Inter-American Affairs is primarily responsible, perhaps exclusively so, for the dissemination of propaganda. I feel that they are not doing a particularly inspired job, at least as far as the rubber program is concerned. I feel too that, now that the program has been cut down to realizable proportions and the excess number of Americans are to be removed from the Amazon, we should have better publicity. I think that the program should be presented to them, preferably by an experienced Brazilian publicity man. This would enable either the Coordinator or the Rubber Development Corporation or both to withdraw additional American personnel from the region.
In short, the various recommendations made by Donnelly, Maness,50 and myself have been taken up, and I believe that the administrative changes will have been completed within a month or six weeks and that the revamped program will be operating smoothly and successfully by that time. The Brazilian reaction to the revamping of the program can only be favorable. It should, however, be presented in just that light and not as a retrenchment.
I might add that there will be less opportunity for administrative confusion emanating from the Washington end since the staff here is being reduced, the organization becoming a vertical rather than a horizontal one. Mr. Paul McKee is leaving to return to his power companies on the West Coast and Mr. Mitchell51 is returning to his utility interests in Atlanta.
- Prepared by Mr. McLaughlin while temporarily in the Department. Copy transmitted to the Ambassador in Brazil as enclosure to Departments instruction No. 4737, July 9 (not printed).↩
- George H. H. Tate, Defense Supplies Corporation.↩
- Hubert Maness, Vice Consul at Manáos.↩
- Official of the Rubber Development Corporation.↩