832.24/2423: Airgram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received October 18—3 p.m.]
A–2317. Reference Embassy’s telegram No. 4575, September 25, 194365 and previous correspondence with regard to plans for controlling exports of rubber manufactures other than tires and tubes from Brazil.
There is quoted below the text of a letter dated October 6, 1943 from Mr. H. J. Korkegi to the Rubber Development Corporation in Washington with regard to this subject:
“I have your letter of September 2266 on above subject. I regret to report that, to date, the Brazilian authorities have not yet decided definitely how they wish the exports of rubber miscellaneous goods to other South American countries to be handled. We have given them three alternatives:
- 1.
- Announce the quarterly allocations, stating that these may be filled either by Brazil or by the United States at the discretion of the importing country.
- 2.
- Brazil, after announcing the quotas would announce that part that would be furnished by Brazil.
- 3.
- Suspend all miscellaneous goods exports and we would, undertake to purchase, in certain items that we would specify, finished goods equivalent to the amount of crude rubber that is generally exported in finished goods.
We pointed out verbally that it is to the advantage of all concerned that Brazil adopt the first alternative. We also pointed out that if Brazil adopts the second alternative, the Brazilian Government should exercise a certain control on export prices, otherwise the other South American countries might resent the obligation of having to purchase Brazilian goods at exorbitant prices. As to the alternative number three, we pointed out that, if Brazil decides on this alternative, it should be understood that we do not intend to purchase any rubber item that any manufacturer might have available, but we would place orders in certain items that we need for the war effort.
To date the Brazilian Government has not given us a decision as to which of the three alternatives they would wish to follow, nor have we had from them as yet an expression of opinion as to how they would wish to handle these miscellaneous goods exports in the future. [Page 680] There seems to be a difference of opinion amongst themselves and frankly, personally, I am reluctant to push them too hard for a decision. As up to the last week in September no decision had been taken, our Embassy cabled the State Department asking them to announce the quota for the fourth quarter, disregarding Brazil for the time being. We expect to have this question settled sometime this month, so that a procedure may be established beginning with the first quarter allocations 1944.”
The Embassy and the Rubber Development Corporation are continuing to work on this problem but as indicated in the letter, negotiations have reached a stage at which it will be necessary for the Brazilian authorities concerned to agree among themselves before it will be possible to make any further progress.