The Chargé in Brazil (Daniels) to the Secretary of State
[Received 4:57 p.m.]
612. Communist Tribuna Popular March 31 contains vicious article characterizing “Washington agreements” as responsible for inability of Brazil to obtain wheat from Argentina. Article states that normalization of Argentina–Brazilian commerce would end the economic encirclement of the country by monopolistic North American colonizing capitalism and states that powerful interests of Wall Street would care little if the Brazilian populace was left without bread. Article insists that only by exporting rubber and its manufactures to Argentina can wheat problem be solved. Similar criticism of crude rubber agreement hampering procurement needed wheat supplies has come from other sources including Brazilian officials.
In view of the harm which is being done by attacks on rubber agreements14 which are by no means confined to Communist circles, Dept may wish to consider advisability of making gesture of offering to cancel the basic rubber agreement of 1942 if such action is desired by Brazil. It is not believed that Brazil would request cancellation since the wiser counsels of those in FonOff who are fully aware of benefits to Brazil of rubber agreement would probably prevail. Thus we would silence at no cost to ourselves the critics who are blaming [Page 124] our exclusive rubber purchase for the wheat shortage. Argentina presumably would not pay 60 cents per pound for Brazilian rubber in any event. If Brazil requested cancellation, small amounts available for export could not have a seriously disruptive effect on prices, and we would be relieved of obligation of buying Brazilian rubber at price far above world level.
Additionally such an offer would give Brazil option of accepting same status as other Latin American rubber producing countries whose agreements with US will expire in 1946.
Brazilian Govt has not yet replied to Embassy memo based on Dept’s recent tel on rubber policy.
In light of foregoing considerations request telegraphic authority to hand memo to FonOff expressing willingness of US Govt to cancel crude rubber agreement immediately or at such time prior to June 30, 1947, as may be considered convenient by Brazilian Govt, if Brazil desires such cancellation to assist in meeting problem of obtaining wheat from Argentina.15
Repeated to Buenos Aires.
- For information on rubber agreements, see Foreign Relations, 1942, vol. v, pp. 691 ff.↩
- The Chargé reported in telegram 628, April 3, 1946, 7 p.m., that the Brazilian Foreign Minister did not wish to cancel the rubber agreement and recommended that the Department approve the request to ship 1,500 tons of rubber to Argentina as an emergency measure (832.24/4–346).↩