832.51/10–2246: Telegram

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

confidential

1790. Deptel 1369, October 2, 7 p.m.20 This morning I went to Foreign Office to discuss Vale Do Rio Doce matter with Foreign Minister Gracie at latter’s request. Gracie referred to telephone conversation with Ambassador Pawley and explained situation regarding his letter of October 10 (Embtel 1770, October 16) as follows:

1.
Brazilian Government stated in letter its interest in completing project.
2.
Letter cited as evidence the policy the credit of 50 million cruzeiros authorized September 12.
3.
Since additional credit was not actually opened before installation of Congress, congressional approval must be obtained for additional credit necessary to conclude construction within 24 months. It would not change matters if reference to Congress were omitted from letter inasmuch as congressional authorization is now necessary in any case.
4.
Since Government policy is to go ahead with project as stated and since Government expects congressional support, letter states credit will be available to be utilized within a stated period of 24 months.
5.
In view foregoing, Gracie perceives no way in which letter could usefully be changed and added that any change would necessarily have to be in consultation with the new Minister of Finance and Transportation.21

This afternoon I acquainted Martin of Exim Bank with foregoing. He is leaving for Washington October 25 and will discuss matter further with Exim Bank board.

Daniels
  1. Not printed.
  2. Pedro Correa e Castro.