832.6363/7–1045: Telegram

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

2166. For Dept., FEA and WPB.44 Embassy is considering Dept.’s telegram that local shortage of oil prevents allocation of more than 5,000 tons per month additional fuel oil to Brazil. Embassy is unwilling to make this argument because quite bluntly it would not be believed. Global oil shortage was stressed to Brazil just prior to unlocking of 500,000 tons for Argentina. Disparity of figures is too great. Further, Embassy believes fact of global shortage should be reexamined. There may well be global shortage of oil meeting specifications of Navy 1 and 2; but such high specification oil not required for fuel purposes in Brazil.

Dept., FEA, and WPB also must be aware of fact that they have negotiated for and obtained textile production calling for 8,000 tons oil monthly, and food production which will eventually call for approximately 10,000 tons monthly if food is to reach ports. Meanwhile, nearly 1,000,000 bags of rice are rotting in Goiaz for lack of transport now; and local distress is mounting. Under these circumstances 5,000 tons additional does not represent realistic approach, since it is doubted whether Govt, can withdraw oil from existing country needs aggravating existing distress. Yet this is what must be done if program negotiated for is to go forward.

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Embassy cannot refrain from observing that this is what happens when uncoordinated negotiations take place. In each case impression was created that oil needs for production would be taken care of somehow, and while specific commitment not made, effect of 5,000 ton allotment will be that of renewing [reneging?] on general understanding. Certainly no negotiation went forward on basis that country must withdraw oil for [from?] its own needs for production and export.

Under these circumstances, Embassy believes that interested agencies should get together and take bull by horns. If there is residual fuel oil, that can be used to increase allotment. If not, or if such oil is inadequate, Embassy believes matter should be squarely faced with Argentine Govt, and approximately 180,000 tons should be temporarily withdrawn from Argentine commitment for use in Brazil. Certainly if this technique could be applied at once to untransported rice surplus, immediate results could be obtained.

Kindly cable answer. Ambassador proposes visit Goiaz to examine rice situation on Saturday.

As background all hands should have in mind that Embassy continues to receive anonymous letters contrasting Brazilian with Argentine situation.

  1. War Production Board.