832.51/10–1646: Telegram

The Chargé in Brazil ( Daniels ) to the Secretary of State

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1770. Following is English translation of letter dated October 10 just received by Embassy from Foreign Office regarding financing of Companhia Vale Do Rio Doce: [Page 501]

“Mr Chargé d’Affaires:

  • “1. Confirming the conversation which I had with Ambassador Pawley prior to his recent trip to the United States, I am glad to provide certain information with respect to what the Brazilian Government has done as part of the tripartite agreement concerning the Companhia Vale Do Rio Doce, S.A.
  • “2. Not only by its director in direct participation in the capital of the company under reference, which amount to cr $200,000,000.00 (200 million cruzeiros), but also through the issuance of debentures the value of which is cr $300,000,000.00 (300 million cruzeiros), the interest of the Brazilian Government in completing this undertaking is evident.
  • “3. Further, on September 12 last, by decree law No. 9,845, the Government authorized the company under reference to make a loan with the Bank of Brazil S.A., under its joint responsibility, in the amount of $50,000,000.00 (50 million cruzeiros).
  • “4. Furthermore, since it was not possible to conclude the matter before the installation of the legislative power, it has prepared the adequate documentation forwarding to Congress a request for credit operations destined, among others, to the Companhia Vale Do Rio Doce, S.A.
  • “5. In this way the company under reference will have available, to be utilized in 24 months—the period deemed necessary for the conclusion of the construction work—the amount of cr $500,000,000.00 (500 million cruzeiros), destined to this end.
  • “6. I would greatly appreciate your bringing the foregoing to the knowledge of the Department of State.

“I avail myself of the opportunity to renew the assurances of my very distinguished consideration. (Signed) S. De Souza Leao Gracie.”

Embassy will inform Martin, who is now on trip in interior. Please inform Pawley and Export Import Bank.

Daniels