561.333D3/7–244
Memorandum of Conversation, by the Chairman of the Inter-American Coffee Board (Cale)
| Participants: | Mr. Arthur Souza Costa, Brazilian Finance Minister. |
| Mr. Valentim Bouças, Head of the Commission for the Control of the Washington Agreements. | |
| Mr. Ivan B. White, Second Secretary, American Embassy, Rio de Janeiro. | |
| Mr. James P. Delafield, War Food Administration. | |
| Mr. Acheson, A–A.24 | |
| Mr. Wright, ARA.25 | |
| Mr. Cale, CD. |
In opening the meeting Mr. Acheson stated that we desired to pursue somewhat further the subject of an understanding concerning the sale and shipment of Brazilian coffee to the United States. The Brazilian Finance Minister stated that it was his impression that a complete understanding regarding this matter had been reached during his discussion of June 30 with us in Washington.26
Mr. Cale said that it was his impression that the basis of an understanding had been reached in Washington and that since talking to the Finance Minister he and Mr. Delafield had had an opportunity to explore the matter somewhat further with other representatives of the United States Government and were now in a position to make a more definite proposal to the Finance Minister than had been suggested in Washington.
The Finance Minister indicated that he expected that this new proposal would contain a provision for some upward adjustment of the quotas and that he would be very much opposed to such a provision because it would make his position in forcing the sale of Brazilian coffee very much more difficult, if not impossible.
Mr. Wright and Mr. Acheson assured the Minister that our desire was to reach an understanding that would involve no increase in the quotas.
The Finance Minister produced a statistical compilation which he had made during our conversation with him on June 30 (see CD’s memorandum of that date) and stated that he felt that we had no problem if he were to sell 1,000,000 bags of coffee to the Army for shipment during August. In this connection he pointed out that we had stated that an inventory of 3,900,000 bags would be desirable as [Page 154] of October 1 and had indicated that we would have an inventory on October 1 of 3,165,000 bags. The sale of 1,000,000 bags of coffee by the Brazilian Government to the Army, he said, would therefore give us an inventory on October 1 of 4,165,000 bags and eliminate our problem.
Mr. Cale and Mr. Delafield called attention to the fact that an allowance of 1,700,000 bags of coffee had been made in the compilation for Army requirements and that of this amount the Army had bought only 700,000 bags and would therefore need to buy an additional 1,000,000 bags. It would therefore take the million bags the Minister planned to sell the Army to give us the inventory of 3,165,000 bags on October 1. This indicated the need, they said, of an arrangement whereby an additional quantity of coffee would be sold by Brazil for shipment during August. They expressed the view that this quantity should not be less than 500,000 bags.
In response to a question from the Finance Minister they stated that the complete proposal would involve the sale of 1,000,000 bags of coffee to the Army by July 15 for shipment during August such coffee to be of types suitable for consumption by the Army, and the assurance by the Brazilian Government of further shipments of coffee from Brazil in the amounts of 500,000 bags during August and 1,000,000 bags each month from September through December inclusive. They further stated that they proposed that all the coffee should be sold through normal trade channels at prices which would permit resale within United States price ceilings and that coffee other than that sold to the Army should be of types suitable of civilian consumption in the United States. (The descriptions subsequently agreed upon for Army and civilian coffee were the same).
Mr. Wright stated that should the Finance Minister approve the foregoing proposal, the United States Government would instruct its delegate to the Inter-American Coffee Board not to recommend or support a resolution providing for a further increase in the quotas during the current quota year.
The Finance Minister indicated his willingness to reach such an understanding provided he could obtain assurance from Mr. Guedes27 of the DNC that it would be possible for the DNC to deliver the quantities of coffee within the time limits of the foregoing proposal. He stated that he would communicate with Mr. Guedes immediately and would inform us of his decision following receipt of the reply.