832.61333/1–2745: Telegram

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

257. General Hardigg49 of the Quartermaster General’s Office conferred January 26 with Clayton50 and other ranking officials of the Department regarding the Army’s coffee situation. The latter is so precarious that it was decided to attempt to have the coffee trade here [Page 689] make available for immediate Army use some of the coffee originally purchased for civilian consumption. It would appear that rationing cannot long be delayed in the absence of the sale of substantial quantities of coffee by producing countries for Army use.

No reply has been received to Department’s 207, January 20,51 requesting details on the coffee realization bond proposals. It would appear that time is getting very short.

For the Embassy’s secret information, it has been learned that Souza Costa52 and Penteado53 are considering the possible effect of using delaying tactics in the sale of coffee on the determination of the United States to hold present ceiling prices.

With regard to the last point, it appears that Colombia is employing delaying tactics, similar to the apparent Brazilian strategy.

In view of the above, the Embassy is requested to make clear to Souza Costa:

The extreme urgency of the situation and the imminence of rationing.
The futility of expecting to get a higher price.
The need for working out a plan at once for supplying substantial quantities of coffee to the Army.

  1. Maj. Gen. Carl A. Hardigg.
  2. Assistant Secretary of State William L. Clayton.
  3. Not printed.
  4. Arthur de Souza Costa, Brazilian Minister of Finance.
  5. Eurico Penteado, Brazilian delegate to the Inter-American Coffee Board.