The Chargé in Brazil (Daniels) to the Secretary of State
[Received May [16?]].
Sir: I have the honor to transmit the original of a letter dated May 3, 194612 addressed to the Export-Import Bank of Washington by Mr. R. K. West, representative of the Bank in Rio de Janeiro and a director of the Companhia Vale do Rio Doce. There are likewise enclosed copies of this letter for the Department’s information and files, a copy being retained for the Embassy’s files.
This letter with its enclosures reports recent developments in the policy of the Government of Brazil relative to the provision of the funds required for expenditure in Brazil in accordance with the memorandum agreement of March 3, 1942.13 Attention is particularly invited to the statement of the Minister of Finance as reported in the letter, “that if anyone wished to provide the additional funds required to complete the program he would be pleased to turn over the entire operation of the mines and the railroad on very favorable terms”. This statement would appear to afford a good opportunity to explore the possibility of renegotiating the terms of the $14,000,000.00 credit in such a way as to (a) give the Export-Import Bank a better opportunity of recouping its investment and (b) ensuring a more rapid development and more efficient operation of the mines and railroad. It is assumed that the second objective is of importance because of the desirability of having available in the hemisphere added iron ore reserves.
It is generally known in Brazil that with efficient management and adequate funds the whole project would advance more satisfactorily. In the light of the foregoing considerations it is recommended that Mr. West’s letter of May 3, 1946 and in fact that entire project be studied again most carefully by the Department and the Export-Import Bank with a view to instructing the Embassy as to what further specific proposals might be made to the Brazilian Government.