Memorandum by the Chief of the Division of Brazilian Affairs (Braddoek)33

The Brazilians having indicated their desire to hold informal exploratory conversations at a working level on this subject, Mr. Kempter34 and I met Dr. de Mello35 and Mr. Garcia36 for luncheon yesterday. They indicated that their Government was considering applying for a revision of the Lend-Lease Agreement with Brazil37 in order to scale down the rate of reimbursement provided therein. They stated that this Agreement had been entered into before Brazil was an active partner in the war, and that they believed that its terms were less favorable than the terms in our agreements with our other major Allies. Mr. Kempter and I informed them that in our opinion the United States would not consider reopening this Agreement, not only because we believed it to be a fair agreement but also because if the Agreement with Brazil were revised many other countries would most certainly also request revisions and the whole Lend-Lease system of repayments might break down. Mr. Kempter also endeavored to show Dr. de Mello and Mr. Garcia how Brazil’s own credit in this country would be impaired by any request for a release or diminution of her obligations. We talked over in some detail various items and the Lend-Lease account, including the ship charters and material furnished the Brazilian Expeditionary Force. Mr. Garcia made the point that on some of the Lend-Lease equipment Brazil had been overcharged. He [Page 408] was assured that full consideration would be given to any such claims which the Brazilians were able to substantiate and it was stated by Mr. Kempter that the United States for its part might also have some claims to be considered in the final settlement.

Daniel M. Braddock
  1. Addressed to the Director of the Office of American Republic Affairs (Briggs), and the Assistant Secretary of State for American Republic Affairs (Braden).
  2. Charles W. Kempter, Chief, Lend-Lease Staff, Office of the Foreign Liquidation Commissioner.
  3. Edgard de Mello, Brazilian Commercial Counselor.
  4. Celso Raul Garcia, Second Secretary, Brazilian Embassy.
  5. Signed March 3, 1942, Foreign Relations, 1942, vol. v, p. 815.