The Chargé in Brazil ( Key ) to the Secretary of State
1582. Discussed with Foreign Minister8 last night four points cited Deptel 1269, November 12, pointing out to him that validity of point (a) impaired by fact that to all practical purposes Lloyd Brasileiro sole Brazilian entity operating vessels engaged in international trade and that docking facilities coastwise trade have heretofore been ample; that since Lloyd Brasileiro vessels engaged in overseas trade do not generally carry foodstuffs from other Brazilian ports this being task almost exclusively of coastwise trade vessels which not affected by priorities. Present priority system does not therefore assure supply foodstuffs from Brazilian ports as claimed point (b); that point (c) not accurate since beginning November eight vessels have been accumulating in stream Rio and at close business November 12, five vessels were awaiting berthing facilities. Of these Mormacsea in number 1 position liable under present priority system to be superseded by Lloyd Brasileiro vessels in positions 2 and 3; that consequently statement point (d) erroneous.
I urged Foreign Minister to review question in light of foregoing and of assurances given to Ambassador Pawley by President Dutra with a view to rescinding without delay if possible pertinent sections of administrative orders extending preferences to Lloyd Brasileiro vessels.
I mentioned also that US shipping circles resented discriminations resulting from preferential treatment accorded Lloyd Brasileiro vessels, that they were becoming impatient because of failure of Brazilian authorities to correct the situation and that unless remedial action were soon forthcoming there was danger situation would get out of hand and pressure develop to point where American shipping interests would demand US Government take counter measures under existing legislation. I added that the easing in the berthing situation Rio would appear to make removal of present discriminatory measures correspondingly easier.[Page 441]
Fernandes agreed to review Brazilian position at once and to investigate possibility of rescinding administrative orders above mentioned which he felt would have immediate practical effect of abolishing discriminations and which could be done without requiring Congressional action which would be necessary were the decree law on basis of which the administrative orders were promulgated to be modified or repealed.9