Memorandum by the Chief of the Division of Brazilian Affairs (Braddock)22

In connection with the attached telegram no. 1770 of October 16 and no. 1790 of October 22 from Rio on the subject of the Brazilian loan, it is my belief that the Eximbank should accept the assurance offered by Brazil in these telegrams as meeting the Bank’s condition for granting the new $50,000,000 loan to Brazil. My view is based on the following reasons:

Though not iron-clad, this assurance is pretty good and at any rate the best that we can get at this time.
If the new loan, which has already been publicized a good deal in Brazil, fails to come off there will be general disillusionment there concerning the friendship of the United States and its desire to help Brazil.

I talked with Ambassador Pawley in Rochester about this and he also strongly favors acceptance of the assurance offered. He especially requests that no final rejection be made by Eximbank without giving the Department and himself the opportunity to find a way out.

Immediately after my talk with Ambassador Pawley Mr. O’Toole and I met with Mr. Havlik and Mr. Stenger23 of ED to discuss this matter. It was decided that no reply should be given to Brazil pending the return of Mr. William McChesney Martin of the Eximbank from Brazil next week and discussion of the subject with him, on which occasion ED and OFD would see that our views as expressed above were taken into full consideration.24

Daniel M. Braddock
  1. Addressed to the Director of the Office of American Republic Affairs (Briggs) and to the Assistant Secretary of State for American Republic Affairs (Braden).
  2. Hubert F. Havlik, Acting Chief of the Division of Investment and Economic Development, and Jerome J. Stenger of the same Division.
  3. A marginal comment reads: “This is right move. S. B[raden].”