832.24/10–2645: Telegram

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

3248. As this Embassy interprets present instructions, State Dept. is now responsible for liquidation of surplus supplies to be sold locally. We have, of course, no organization for that purpose nor any inventory or other list of supplies so that responsibility is virtually unlimited. We will, of course, do best we can but it should be clear that we cannot accept responsibility for unknown situation.

To cope with problem Embassy has taken following steps:

Primary work of isolating supplies to be sold is to remain with agencies of govt, in possession of them, appropriate Army authorities, Navy authorities, etc.
All steps taken with full files and memoranda are to be reported to Embassy. Mr. Brooks, Economic Counselor, is in charge and is designating one man to receive and review all papers of any kind maintaining exact file on each lot or liquidation problem as it arises. Economic Counselor will appoint review committee to examine all transactions as they are proposed with power of approval or disapproval.
So far as possible any transaction involving sale or disposal of property should be matter of public knowledge, either by publication of request for bids, or where properties are such that negotiation is needed, by publication or other general offer to parties who might be interested so as to obtain as many offers as possible.
As general principle govt, authorities, national, state, or local, who indicate interest should have priority over private interests where offers are approximately equal.

Embassy would much appreciate ideas of Dept. on this general line. For instance, we have immediately [taken?] up problem of Navy disposal of Bahia and Recife oil tanks, which have one value as going concern and another value of scrap, and which obviously are of interest only to oil companies.