The Chief of the Division of Brazilian Affairs ( Dawson ) to The Chargé in Brazil ( Key )
Dear David: I have delayed answering your letter of October 1565 concerning the question of title to the various war vessels Lend Leased to Brazil during the late War until I could discuss it with the Ambassador and get a few reactions around here. In this connection, the Ambassador turned over to me your letter to him of September 22 on the same subject and I have that before me, too.
First, it seems well to clarify one point. Nobody here, so far as I have been able to discover, has ever had the idea of trying to repossess the 8 destroyer-escorts or any of the other vessels which were turned over to Brazil. It has been both the Navy’s and the Department’s idea to try to turn these ships definitely over to the Brazilians as soon as possible and on as generous terms as could legally be worked out. The difficulty has been that disposal of title to the DE’s cannot be accomplished under present legislation, since they are clearly classified as [Page 418] combat vessels, and will have to wait passage of the legislation which has been pending before Congress for some time to arm the Good Neighborhood or some other legislative authorization.
Both the Navy and FLC have wanted to get rid of the other vessels, since they can be disposed of under the Surplus Property Act of 1944,67 and leave the DE’s under exactly the same status as they now have until the arms bill is acted upon. The FLC has placed a value of $414,128 on the vessels other than the DE’s as what Brazil would be expected to pay as compared with the total original invoice price of $15,305,709 which they had when Lend Leased (incidentally, there are slight discrepancies between the FLC list and that given in the letter of August 19 from the Chief of Naval Operations to the Chief of the Naval Mission,68 a copy of which was enclosed with your letter to the Ambassador; the FLC list carries 5 LCVP’s instead of the same number of launches, 1 ML instead of 1 landing boat and does not include the YNG; these differences are, however, minor). Whether the Brazilians would consider the less than 3% of the original price a nominal charge, I do not know but there is no way, under the present set-up, in which they could be charged $1 a vessel or whatnot.
The Ambassador feels that telling the Brazilians we are ready to turn over title to the other vessels, whatever the price, would bring up in their minds the question of what would be done about the DE’s and we agree with him here on the political side of the Department. We are consequently urging the Navy and FLC to hold everything until after the Bogotá Conference69 and action on the arms legislation when we hope that it will be possible to deal with all the ships at one fell swoop. The technical boys naturally have wanted to get their books cleared as far as feasible but I think we will manage to make them see the light. In any event, there is nothing further for the Embassy to do on the matter until additional instructions come from the Department. Should the Naval Mission get anything more on the matter from the Navy Department, please let us know so that we can do the necessary at this end.
With cordial personal regards,
P. S. (Dec. 2) This was written a week before the Ambassador went off to Boston but reposed in my basket through inadvertence.…