800.8830 Brazil/212: Airgram

The Secretary of State to the Ambassador in Brazil (Caffery)

A–1570. The Board of Economic Warfare has requested the Department to transmit the following message:

“Reference is made to the Embassy’s A–901 dated May 11th, 1943.49 The BEW wishes to assure you that the Board fully realized the necessity of giving every preference to essential cargo. The shipping situation, however, has eased and the prospects are that shipments in excess of the present target may be continued in the near future. Anticipated May bookings for Brazil amount to 69,500 tons, exclusive of 30,000 tons of coal. Anticipated bookings for June amount to 88,000 tons, exclusive of 22,000 tons of coal. This, of course, does not include 40,000 tons of coal to be shipped from South Africa each month. As long as the shipping situation remains easy and the manufacture of essential materials does not progress in the ratio of available shipping tonnage it well may be that we will have available shipping space in excess of tonnage required for the only available essential materials. Types of cargo vessels available may preclude the complete adherence to recommendations of your A–901.

“We may consequently be faced with the possibility of having ships leaving for Brazil without complete cargoes. Such an undesirable procedure, both for Brazil and ourselves, would have the further disadvantage of possibly causing a diversion of ships now included in the Brazil service, to other destinations.

“Under the circumstances, the BEW believes that the non-importable list50 no longer serves a useful purpose. The public knowledge of the existence of such a list in the United States is causing considerable confusion and antagonism to the whole Decentralization [Page 729] Plan.51 The cancellation of the non-importable list, suggested by the BEW, will in itself not result in the licensing of non-essentials. The Carteira52 will continue to issue preference requests based upon its own determination of essentiality at the time the preference requests are issued and this therefore eliminates the necessity of any list.

“The Board will control all exports of essentials and non-essentials through shipping licenses and hence in effect will limit exports of non-essentials to tonnages available after all available essentials will have been shipped. You can give the Carteira the BEW’s assurances that they will, at all times, give preference requests shipping priority and will not permit shipments of non-essentials unless surplus space is available. As the desired result will now be achieved by preference request procedure and the limiting of shipments of non-essentials to the surplus space available without unfavorable public reaction in the United States the cancellation of the non-importable list appears highly desirable.

“Further, in order to permit the necessary flexibility to take advantage of all available shipping space to Brazil you are requested to secure the Carteira’s agreement to the licensing of any material outside of allocated materials without preference requests provided such materials are shipped only after all available materials covered by preference requests have been shipped.”

For the Ambassador from the Department

The Department and the BEW have discussed the situation with respect to the above problem, in the light of the recent signing of the supplemental agreement53 and also in view of the considerations contained in the Embassy’s airgram, no. 901, May 11, 4:30 p.m. It is not the intention that these proposals be forced upon Brazil, but it is our desire that the matter be thoroughly discussed with the Carteira with a view to obtaining their agreement unless you believe that the considerations which you mention in your 901 make it inadvisable in your opinion even to discuss the matter with the Carteira, in which event you are asked to cable fully your reasons therefor.

It might be added that the BEW is apprehensive that the facilities of the certifying agencies are not at present sufficiently organized to achieve flexibility to take advantage of unexpected increases in shipping. The BEW believes that such flexibility can only be achieved by exercising its own licensing authority here.

The Department has sought assurance from WSA54 that shipping is indeed easier but because of the unpredictable requirements of the Armed Forces, such assurance cannot be given and the WSA can do no more than reiterate its hope of meeting the monthly target tonnages for the balance of the year. The more favorable shipping outlook for June and possibly July is of course temporary and no assurance [Page 730] can be given that it will be continued or repeated in the future. In this connection, it might be added that the bookings referred to in BEW message should not be quoted to the Carteira.

The Department understands that the situation is urgent since the BEW fears there may not be sufficient cargoes available to satisfy the expected increased shipping in June and more particularly, July.

It is suggested further that the Embassy in cooperation with the Carteira arrange to place orders by telegram for an additional 50,000 tons of materials essential to the economy of Brazil. These materials should be of the type that are readily available and that do not require WPB55 priority assistance for manufacture or processing. This additional tonnage should serve to help in the creation of a backlog calculated to take advantage of any sudden windfall in shipping.

The Embassy’s comments and recommendations are requested as soon as possible.

  1. Not printed; it cautioned against relaxing restrictions on shipments of nonessentials in view of the great deficiencies in the supply of coal, wood pulp, iron, steel, and the materials for such projects as the National Steel Plant and Itabira.
  2. See telegram No. 3004, June 19, from the Ambassador in Brazil, p. 732.
  3. See ante, p. 150.
  4. Carteira de Exportação e Importação, Bank of Brazil.
  5. See pp. 155159.
  6. War Shipping Administration.
  7. War Production Board.