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

No. 16028

Sir: With reference to the Embassy’s despatch No. 15820 of May 12,99 I have the honor to attach copies and a translation of a letter of May 20 and a memorandum from the Ministry of Foreign Affairs1 suggesting a revision in ceiling prices on Brazilian coffee in the United States, “to the effect that it may receive in the United States of America the same treatment as that given to the majority of producing countries with respect to ceiling prices”.

The Minister of Finance has requested the Embassy to send the enclosures by airmail to the Department. The Minister hopes that the Department and the Office of Price Administration will give prompt consideration to the memorandum and expedite a reply to it. According to the Minister, the Ministry of Foreign Affairs has forwarded copies of the memorandum to Sr. Penteado. The Minister stated also that he had recently discussed the matter with Sr. Valentim Bouças,2 who is now visiting the United States, and that Sr. Bouças had indicated that it would be difficult to obtain an upward revision of coffee ceiling prices in the United States.

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The Embassy has informed the Minister of Finance on at least three occasions that the OPA was not disposed to increase ceiling prices on coffee in the United States. Despite these statements, the Minister feels that he must make at least one more attempt to obtain a readjustment of the ceiling prices on Brazilian coffee in the United States. The Minister told the Embassy representative on May 23, that if our Government’s reply is negative, he will then take whatever steps are necessary here to bring coffee prices within the range of the ceiling prices in the United States and to resume large scale exports of coffee to the United States.

A report today from Santos indicates that the coffee trade there has ascertained that the Brazilian Government has delivered the attached memorandum to the American Embassy and on the strength of this report prices of coffee for future deliveries have soared to new levels. Future sales in Santos are at a standstill and it is unlikely that the situation will change until the decision of our Government on the proposal is made known to them through the Ministry of Finance and the National Coffee Department.

Respectfully yours,

For the Ambassador:
Walter J. Donnelly

Counselor of Embassy for Economic Affairs
  1. Not printed.
  2. Neither printed.
  3. Executive Secretary of the Brazilian Commission for the Control of the Washington Accords.