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  4. Document 417

740.32112 RP/12–2346

Memorandum by the Assistant Chief of the Division of Economic Security Controls (Monsma) to the Chief of the Division of River Plate Affairs (Mann)

confidential
[Washington,] December 23, 1946.

In reply to your recent request received orally through Mr. T. R. Martin of your Division, the following information concerning the Replacement Program for Brazil is contained in the files of this Division:

1.
Total number of Axis spearhead firms: 120.
2.
Number of firms in which enemy interest has been eliminated through nationalization or liquidation of the firm, vesting, reorganization, etc.: 82.
3.
Number of firms in which enemy interest is in the process of elimination: 29.
a.
Number in which liquidation of firms or elimination of enemy interest has been decreed, but no transfer of enemy assets or interest has been made: 2.
b.
Number in which liquidation of firms or elimination of enemy interest has begun i.e. part of enemy interest has been sold or transferred: 9.
c.
Number in which liquidation of firms or elimination of enemy interest is nearly completed and requires only final steps, such as filing documents of dissolution, disposing of certain assets for which no buyer can be found, etc.: 18.
4.
Number under administration or intervention, where Government has complete control: 4.
Of these, one is bankrupt and will be dissolved; the locally resident partners of one firm have proposed that the firm be dissolved and that enemy interest be placed into Indemnization Fund; one firm escaped liquidation by exerting political pressure, but it underwent a reorganization which eliminated the principal enemy interest; the fourth is a plantation which is now in the possession of the State of Para.
5.
Number under supervision where owner retains control: 2.
Conclusive evidence of enemy ownership of these two firms was not obtained until recently, evidence now available may lead to eventual liquidation of the firms.
6.
Number in which no action has been taken: 3.
These firms were included in the Proclaimed List in February 1946, on information discovered last fall that they were German-owned. A complete report with substantiating evidence was received from Germany in July. It is expected that the firms will be placed in liquidation.

Since the withdrawal of the Proclaimed List in July of this year, Brazil has completed the liquidation of six firms or has eliminated the enemy interest therefrom. In several instances Brazil has expropriated the property of naturalized Brazilians of German origin; one example of such action is the firm Hermann Stoltz & Cía. in which the interest of several Brazilian partners is being liquidated.