832.51/3–2147
Memorandum by the Chief of the Division of Brazilian Affairs (Dawson)18
You will recall ARA’s strenuous objections to the Eximbank approval of the new $7,500,000 credit for the Cia. Vale do Rio Doce about a month ago. Figures on the interest payments on the original $14,000,000 loan not guaranteed by the Brazilian Government have just come to light. These show that $1,429,000 interest had accrued through May 7, 1946 and that payments received to that date were $267,000, leaving a balance of lapsed and unpaid interest totaling $1,162,000. [Page 444] During the rest of 1946 only $26,000 was accumulated to be applied to the current notes, a figure considerably less than in any recent preceding similar period. In other words, the unpaid interest will probably accumulate approximately another $500,000 by May 1947.
The Eximbank has given us no figures as to interest on the subsequent $5,000,000 loan guaranteed by the Brazilian Government. However, since the original loan has first lien on ore sales, transportation costs, et cetera, if anything has been paid on the $5,000,000 loan it will have been by the Brazilian Government, not by the Cia. Vale do Rio Doce.
These figures would seem to indicate that ARA’s objections to the new loan were more than sound.
- Addressed to Messrs. Smith, Wright, Woodward, and Braden, of A–Br, and to Mr. Briggs of ARA.↩