839.113/12–1547: Telegram
The Chargé in Brazil (Key) to the Secretary of State
us urgent
niact
1709. Morales and Venezuelan Ambassador22 called on me this afternoon. Morales first reviewed his negotiations with Fernandes which however had accomplished nothing tangible and had failed to bring to light any new points of importance except that he stated Brazilian Foreign Minister had eventually admitted that on basis more recent information obtained from War Minister the transaction was “considerably larger” than he had first been led to believe. Morales insists that war material totalling in value $6 million is involved and that this includes rifles, machine guns, artillery, mortars and ammunition but did not claim that this had been corroborated by Foreign Minister.
Morales stated his appointment with President Dutra originally scheduled December 12 had been postponed until 4:30 tomorrow afternoon December 16. He fears President will take line that since contracts have been entered into and sales made it will be impossible to cancel deliveries at this late date and that furthermore there will be no necessity to do so in view of explicit assurances received from Dominican Republic that arms will be used for defensive purposes only. In view of anticipated unsatisfactory outcome his interview with Dutra tomorrow Morales asked me if I would not at once intercede [Page 141] at least to extent of pointing out to Foreign Minister the anxiety which this arms deal was creating in various countries including Venezuela and express hope therefore that the transaction would be cancelled. I replied that I felt sure he would appreciate, having once been a Foreign Minister, that I could not interfere in so delicate a matter without explicit instructions from my Government and furthermore that I felt it would be premature for Embassy to raise such a matter before he had had opportunity to present his Government’s views to Dutra.
Morales stated he appreciated foregoing but that the reason for urgency was that according to information received from his “agents” a Dominican Republic corvette had arrived here night of December 13, was now loading arms and would probably depart tomorrow. He felt it would be in order therefore for me at least to suggest to Brazilian Foreign Minister that departure of this vessel be delayed. I contented myself with merely asking whether he had himself mentioned this to Fernandes to which he replied in negative. As a matter of fact we have been definitely assured by official of Ministry of Marine that no Dominican vessel is in port and that none is expected for another 48 hours.
I asked Morales whether he had mentioned to Brazilian Foreign Minister possibility of Venezuelan embargo on petroleum shipments to Brazil if latter fails cancel arms sale. He stated he had not done so lest this should be interpreted as a “threat” but that he had referred to this possibility in recent conversation with Brazilian head of Ipiranga Oil Company who said that he in turn would mention it to the head of Conselho Nacional de Petroleo. Morales evaded any direct answer to my query whether he proposed mention oil embargo possibility to Dutra tomorrow but left impression that Dutra would be apprised of this possibility through head of Conselho. Embassy does not share opinion expressed by Venezuelan President and Foreign Minister last paragraph Caracas’ 504 December 14 that Brazilians would cancel deal if US Government indicated such was its wish. On contrary we believe intervention would not only be resented but would most probably be ineffective: on legal grounds Brazilian Government has a strong case in view of assurances received from Dominican Republic; as a practical matter involvement high army officers renders it politically inexpedient for Dutra to cancel the deal without running the risk of possible serious domestic political repercussions. Furthermore, sight should not be lost of fact that the support of influential Brazilian Army officers will probably be essential to the enactment of a satisfactory petroleum law. I can think of no better way of antagonizing this group than by interfering in this deal which to all practical purposes appears to be a fait accompli.
[Page 142]Please instruct urgently as Morales plans to call on me tomorrow after his interview with Dutra.23
Department please repeat to Caracas and Ciudad Trujillo such portions this telegram as is deemed advisable.