Memorandum of Conversation, by Mr. J. K. Havemeyer of the International Resources Division

Participants: Mr. Melo, Brazilian Embassy
Mr. Garcia, Brazilian Embassy
Mr. J. G. Mien, BA
Mr. J. K. Havemeyer, IR

On August 10, 1946, Mr. Squires of OPA requested Mr. Havemeyer to secure, if possible, an Understanding with the Brazilian Government concerning coffee price ceilings in the U.S. and the marketing of coffee in Brazil similar to the Understanding signed by the U.S. Government and the Brazilian Government on June 25, 1946.53 The proposed Understanding omits item (2) and changes item (1) of the June 25, 1946 Understanding to read as follows:

The Government of the United States will take immediate steps to increase green coffee price ceilings by 8.32 cents per pound Ex-dock New York above the ceilings announced by the United States Government December 27, 1941 in price schedule RPS 50.

Mr. Mein and Mr. Havemeyer presented the proposed Memorandum of Understanding to Messrs. Melo and Garcia who advised they were not in a position to sign a new Understanding as they were cooperating with Colombia in a request to the U. S. Government to decontrol coffee prices in the U.S.

Mr. Havemeyer stated that he believed that foreign governments and nationals could not make a request for decontrol direct to the OPA. The procedure set up by the OPA Act provides that the request for decontrol be presented by U. S. nationals direct to the OPA. The OPA then forms an Industry Advisory Committee which formulates recommendations concerning the decontrol of coffee prices and forwards same to the Decontrol Board for action. The Brazilian Government representatives were advised that the National Coffee Association had already requested the OPA by letter on August 2, 1946 to decontrol coffee. The Brazilian Government representatives were, also, advised that action on this decontrol request, probably, would not be taken until after August 20, 1946, which is the deadline stated in the OPA Act for the Decontrol Board to replace price ceilings on agricultural products such as meat, grain, etc.

The Brazilian Government representatives were advised that the new prices suggested in the copy of the proposed Memorandum of Understanding will assure the coffee producer 80 above the ceilings [Page 522] of December, 1941 and 3¢ above the ceiling plus subsidy which was in effect on June 30, 1946. The proposed price ceilings cover approximately 90% of the purchases made by U.S. importers during the period of decontrol.

The U. S. representatives requested prompt action on the proposal because the coffee market has been at a standstill since price controls had been re-established. The Brazilian representatives requested the U. S. representatives to endeavor to delay the OPA action until Wednesday, August 14, 1946, as they would be unable to secure instructions from Bio de Janeiro concerning the Brazilian Government’s position until that time.

Mr. Havemeyer requested Mr. Squires to delay announcement of new price schedules until Wednesday, August 14, 1946. Mr. Squires advised he would not be able to secure approval for this delay until Monday, August 12, 1946, and that he did not believe the proposed new price schedules could be held until August 14.54

  1. See telegram 888, June 29, 1946, to Rio de Janeiro, p. 518.
  2. In telegram 1113, August 20, 1946, 7 p.m., the Secretary of State advised the Ambassador in Brazil that a new coffee agreement was signed. The text was the same as that of June 26 except that the above quoted article replaced articles 1 and 2 in the previous understanding. (832.61333/8–2046)