The Acting Secretary of State to the Brazilian Ambassador (Martins)
Excellency: I have the honor to refer to a letter of April 2, 1945 addressed to the Federal Reserve Bank of New York from Mr. Alberto de Castro Menezos, Vice Director of the Exchange Division, Banco do Brasil, concerning draft no. 3243 in the sum of $35,000,000 drawn by the Brazilian Government to the credit of the Treasurer of the United [Page 644] States, covering the first three installments payable under the terms of the Lend-Lease Agreement signed on March 3, 1942. This letter states that the $35,000,000 draft contained an excess of $1,000,000 because of a credit opened by the Export-Import Bank of Washington in 1941.
According to information which has been received from the Export-Import Bank, the Bank entered into an agreement on May 14, 1941 with Banco do Brasil whereby the Export-Import Bank agreed to establish a credit in the amount of $12,000,000 for the purchase of defense materials in the United States.76 This was part of an arrangement whereby the United States Government obtained the exclusive right to purchase certain strategic materials in Brazil. By the terms of the agreement the credit was to be available only until June 30, 1942.
From the foregoing it would appear that there has been some misunderstanding by your Excellency’s Government concerning this credit. According to my Government’s information the check issued by the Brazilian Government in payment of transfers made under the terms of the Lend-Lease Agreement was correct and no refund of $1,000,000 mentioned in the letter of April 2, 1945 is, therefore, due. It would be appreciated if your Excellency would convey the views of this Government as set forth above to the appropriate authorities of the Brazilian Government.