Foreign Relations of the United States: Diplomatic Papers, 1944, The American Republics, Volume VII

832.61333/975a: Telegram

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

Washington, April 19, 1944—9 p.m.

1263. Reference Department’s telegram 1222, April 15.⁹⁰ The Department and FEA wish to do everything possible to facilitate efforts of the Embassy to obtain termination of the coffee purchase agreement. It is regretted therefore that we have been unable to communicate with the Embassy sooner, following the Embassy’s telephone conversation of April 17 with Mr. Collado.⁹¹

The matter has been discussed fully by officers of the Department and Foreign Economic Administration. While we are anxious to reach an understanding quickly, we are of the opinion that the proposal contained in Embassy’s telegram 1381 of April 13⁹² should be clarified and slightly modified. In this connection, attention is called to the meeting of April 27, 1943 in Rio de Janeiro at which time the Foreign Minister approved an adjustment under which our commitment to purchase Paranaguá coffees was transferred to Santos. It has been our understanding that we have been relieved of our obligation in Paranaguá but in an effort to arrive at a satisfactory basis for terminating the agreement, a quantity of that quality of coffee has been included in our proposal.

In addition, we assume that further purchases which we are required to make, will be accomplished in accordance with the procedure and regulations previously established.

Unless the Embassy perceives objection it is requested to present the following conditions for cancelling the agreement to the Brazilian authorities and to use its best efforts to obtain their approval:

“With reference to this Embassy’s note 2020 of February 1, 1944,⁹³ relative to the purchase agreement, I am authorized by my Government to exchange letters with Your Excellency providing for the termination of the agreement of October 3, 1942 in its entirety on September 30, 1944. My Government undertakes to dispose of the coffee heretofore acquired in outlets outside of the United States unless entry of some of the coffee into the United States should be necessary to meet an emergency situation such as might require a resumption of rationing.

It is understood that the obligation of my Government to purchase further coffee under the agreement will be limited to and discharged by purchasing all or such part of the unshipped balance of 350,000 bags of Victoria coffee for the 1942–1943 quota year as may be offered for sale to my Government prior to September 30, 1944 at prices up to 7.00 cents per pound f.o.b. steamer for Victoria ⅞’s and all or such part of the unshipped balance of 140,000 bags of Paranaguá coffees of the 1941–1942 quota year or their equivalent, as may be offered for sale to my Government prior to September 30, 1944 at prices up to 10.75 cents per pound f.o.b. steamer for Paranaguá 4’s, strictly soft, with differentials for other grades in both cases, in accordance with the OPA Revised Price Schedule No. 50 – Green Coffee, now in effect.

It is further understood that my Government will undertake not to dispose of any of the coffee acquired under the provisions of the immediately preceding paragraph in the United States prior to March 31, 1945, but that it may dispose of such coffee in the United States after March 31, 1945 if, after exercising its best efforts, it is not able otherwise to dispose of it.”

It is requested that we be informed promptly of all developments regarding this matter.

Hull

90. Not printed.
91. Emilio G. Collado, Chairman of the Inter-American Coffee Board.
92. Not printed; in brief, the proposal balanced Brazilian agreement to cancel against United States willingness to buy 350,000 bags of Victoria and 140,000 bags of Paranaguá coffee (832.61333/966).
93. Not printed; it discussed cancellation of the coffee purchase agreement in terms of its relation to shipping, to the continued need for it, and to the manner of disposing of coffee.