561.333D3/1602: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 11:05 p.m.]
5540. Reference Embassy’s 5482, November 25, 7 p.m. Souza Costa told me today that according to his personal investigation of [Page 702] the coffee situation the increase in prices for new crop coffee and decline in shipments are the direct result of the serious transportation problems between São Paulo and Santos. The Minister added he is arranging with the new Coordinator of Internal Transportation to facilitate the immediate movement of new crop coffee to Santos and believes this measure will have the effect of reducing prices to within the range of price ceilings in the United States.
Souza Costa showed me several telegrams from Penteado stressing the seriousness of the situation in the United States and quoting telegrams from coffee associations urging the Brazilian Government to reduce prices and increase shipments of new crop coffee.
Souza Costa is alarmed over reports from the United States that the Inter-American Coffee Board may increase quotas to favor the importation of mild coffee. He said such action is not necessary and would be very unfavorable to Brazil.