The Foreign Economic Administrator (Crowley) to the Under Secretary of State (Acheson)

Dear Mr. Acheson: This is in reply to Mr. Grew’s letter of July 777 in which he pointed out that it has come to the attention of the Department of State that the value of lend-lease transfers to Brazil may now exceed by more than $40,000,000 the “ceiling” of $200,000,000 placed on such transfers by Article II of the Brazilian Lend-Lease Agreement of March 3, 1942.

The records of this Administration, which are based on certified reports furnished by procuring agencies, show that as of May 31st transfers in the amount of $234,836,051.17 had been made to Brazil under the lend-lease agreement with that country. Actual billings to Brazil as of May 31st total $168,185,557.99.

This situation has been the subject of numerous conversations and meetings with representatives of the Department of State. The Department of State staff is aware, therefore, of the fact that billings furnished to FEA by the procuring agencies upon which our reports are based, are often long delayed and may be submitted long after the actual transfer date. Your staff is also aware of certain questions of valuations involved in the reporting of transfers, the resolution of which might have the effect of reducing the over-all figure to one considerably under $200,000,000.

In the event that it is decided to include in the over-all figure for transfers certain values which are now open to question, it is possible that the “ceiling” will have been exceeded. I have not felt it necessary to bring this matter to your attention because I have been advised that the Department of State was negotiating a new agreement with Brazil which would take care of any additional transfers that might be made.

In view of these circumstances, I believe it would be most desirable for the Department to continue its conversations with the Government of the United States of Brazil, looking to the early negotiation of a supplementary agreement. In the meantime, the Department will be kept informed of any decisions by this Administration involving the subject under discussion.

Sincerely yours,

Leo T. Crowley

[Following the termination of hostilities with Japan, notification was sent to the Embassies of countries receiving lend-lease aid that [Page 646] lend-lease operations were ending. For text of note, see circular telegram of October 6, page 256. The note to the Brazilian Ambassador was dated September 28, 1945.]

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