Memorandum by the Assistant Chief of the Division of Brazilian Affairs ( Clark ) to Mr. William K. Miller of the Division of Economic-Property Policy

In connection with your memorandum to Mr. Dawson dated December 770 I wish to advise you that I have discussed this matter with Mr. Garcia of the Brazilian Embassy. Garcia informs me that instead of preparing a proposal to be submitted to the Department of State which would then be submitted to Rio with a recommendation for approval, the Brazilian Embassy communicated with Rio de Janeiro, provided full details and asked for instructions. Garcia has also informed me that the Brazilian Government advised the Brazilian Embassy that the matter would have consideration and study but that no immediate action was anticipated.

It appears to me that this settlement is probably stymied in Rio and I should not be surprised if the reason for the delay is at least partially due to the severe shortage of dollar currency available to the Brazilian Government. From what I know of the situation at the moment the Brazilians would find it a practical impossibility to liquidate the lend-lease settlement even in the reduced payments mentioned under one of your memoranda of December 7.

I gather that Garcia does not anticipate the possibility of any instructions on this matter from Brazil for some months to come. We are consequently faced with the necessity of either letting the matter ride or sending a note to the Brazilian Embassy reminding the Embassy of the desire of the American Government to settle these lend-lease accounts as soon as possible and requesting that the Embassy be so good as to inquire of Rio de Janeiro when some definite steps towards this settlement can be taken.

DuWayne G. Clark
  1. Not printed.