832.6176/7–3144: Airgram

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

A–1045. For Neumann,59 from Allen, Rubber Development Corporation. Have reached agreement with Bouças approved by Minister of Finance with reference to use of synthetic rubber in Brazil which takes the place of Paragraph three of declaration of President Vargas no. 1829 of June 28. This agreement provides among other things as follows: [Page 609]

“The Government of Brazil undertakes to permit the importation into Brazil of synthetic rubber and other plastics having similar properties and utilization duty free, and to permit the use thereof in national industry to the extent necessary to effectuate the purposes of this agreement.

“The Government of Brazil undertakes to bring about, as rapidly as may be found feasible, the maximum practicable reduction in the consumption of natural crude rubber within Brazil below the quota of 8,500 tons per year already established and to encourage the maximum practicable utilization of reclaimed rubber, synthetic rubber and similar plastics.

“As a step in the application of this policy, the Government of Brazil undertakes to bring about, as rapidly as may be found practicable, the adoption by all tire and tube manufacturers within Brazil of the types of tire construction known in the United States as S–5 or S–7, each of which contemplates the use of about 35% of synthetic rubber or similar plastics in place of natural crude rubber.

“Rubber Development Corporation agrees to such increase in the overall consumption quota of 10,000 tons established in the agreement of October 3, 1942, as may result from (a) unrestricted use of reclaimed rubber and (b) the use of synthetic rubber and similar plastics in accordance with the plan and arrangement herein agreed upon; it being estimated that this will enable the Brazilian rubber manufacturing industry to operate at maximum capacity.”

The above arrangement is to be formalized in Rio de Janeiro and would, I believe, require the approval of President Vargas since it alters a previous decree.

As a result of discussions with technicians of Goodyear, Firestone, the Rubber Director’s Office and Bouças it has been agreed that the quickest and most effective way of enabling the utilization of synthetic rubber in Brazil is to have the technicians of the four tire manufacturing companies in Brazil plus two technicians from manufacturers of miscellaneous rubber goods, preferably Orion60 and one other proceed to the United States as promptly as possible accompanied by Dr. Maffei61 or such other representative as may be designated by the Government of Brazil to spend one month in the United States visiting tire factories and studying the utilization of synthetic in the United States. We have agreed to pay the transportation of the members of this Mission other than Firestone and Goodyear to the United States and within the United States while on official business plus such per diem as we may be legally permitted to pay. We will advise later with respect to the rate of per diem.

It is intended that upon the return of this Mission to Brazil the Mission would be constituted a technical committee to provide required [Page 610] technical information and to assist rubber manufacturers in the utilization of synthetic. Copies of the documents concerned are being forwarded to you airmail.63

We have also agreed to extend the price premium of 33⅓ for a further period of one year i.e. until March 31, 1946, in order to aid the producers of natural rubber during the 1945 season. We will advise later when this information may be made public. We have likewise agreed to extend to December 31, 1944, the period during which the remainder of the 16,000 laborers may be recruited, delivered to the Amazon and transported up river by CAETA under the agreement between Rubber Development Corporation and the Government of Brazil dated September 6, 1943.64 Bouças plans to arrive Rio about August 15.

Although Bouças and Sousa Costa have verbally agreed to the foregoing, we have not yet received their written confirmation. [Allen.]

Stettinius
  1. John H. Neumann, field representative of the Rubber Development Corporation.
  2. Orion Sociedade Anónima Fábricas, manufacturers of miscellaneous rubber goods.
  3. Francisco Luiz Maffei, member of the Brazilian office of the Coordinator of Economic Mobilization.
  4. Documents not printed.
  5. Not printed.