832.857/147
Memorandum of Telephone Conversation, by the Assistant Chief of the Division of the American Republics (Walmsley)
In the absence of Mr. Collado, who is sick, and at the request of Mr. Hooker of EA,38 I telephoned Ambassador Martins39 to explain, in accordance with Mr. Collado’s memorandum of February 6,40 approved by Mr. Welles, the reasons why this Government is not at liberty to accept the suggestion of the Ambassador that Brazilian merchant vessels be repaired in United States ports under Lend-Lease.
I explained that in the case of the two exceptions, namely Norway and Great Britain, the factors differed radically from those in the case of Brazil or other countries at war. In the first case, Norway does not dispose of sufficient dollar exchange and has a very large, very active, and very valuable merchant fleet. In the second case, the Lend-Lease arrangement works both ways, American ships receiving repairs in British ports in the same manner as British ships do here.
It has been established as a principle, I explained, that such transactions should not be brought within Lend-Lease and that in the case of Brazil the Lend-Lease agreement had so far been restricted to military materials; and this Government saw no reason to deviate from that policy at this time.
The Ambassador expressed his satisfaction with the explanation and with our reply to his inquiry.