832.6363/8–2147

Memorandum of Conversation, by the Chief of the Division of Brazilian Affairs (Dawson)

confidential

Subject: Proposed Petroleum Law in Brazil; Hoover–Curtice Mission.

Participants: Mr. Arthur A. Curtice of Hoover and Curtice
Mr. Rex Townsend of Hoover and Curtice
BA—Mr. Dawson

Mr. Arthur (Duke) Curtice of Hoover and Curtice called with his associate, Mr. Rex Townsend, until recently an officer of the Petroleum Division of the Department, to “report” after the completion of his mission to Brazil with his partner, Mr. Herbert Hoover Jr.…

. . . . . . .

Actually, six weeks elapsed before the Barreto46 draft was turned over to Hoover and Curtice. They spent the intervening time renewing old contacts. The Barreto draft was found to be completely hopeless. Hoover and Curtice spent a month analyzing it and finally submitted a 100-page memorandum suggesting changes. These were favorably received by Dr. Carvalho who explained, however, that the memorandum would have to be turned over to the Barreto Committee which would be asked to write a “completely new law” based on it. In discussing the matter, Dr. Carvalho said he was not a completely free agent in making decisions on petroleum since General Barreto was autonomous, had practically Cabinet rank and represented the Army.

. . . . . . .

Mr. Curtice gave it as his best judgment that in order for satisfactory oil legislation in Brazil to be feasible it would be necessary to convince the Army leaders (General, Senator, ex-War Minister and Rio Conference Delegate Goes Monteiro, General Obino, Chief of Staff, and five or six others) who were nationalistic. These men thought that keeping a close hold on Brazilian oil for strategic reasons was vital and would have to be shown that opening up production possibilities would be to Brazil’s advantage and that this could only be done with foreign companies’ know-how. He thought that only someone such as Secretary Marshall or Secretary Forrestal,47 in whom [Page 464]the Brazilian Generals had complete confidence and for whose military prestige they had respect, could convince them. When I asked him whether Ambassador Pawley could not do the job, he replied “No”. Mr. Curtice said that when he left Ambassador Pawley indicated to him that he hoped to get the Secretary away from Rio and Petropolis48 for a week-end at a ranch shooting and there to indoctrinate him on the Brazilian petroleum situation with a view to having him take the matter up with General Goes Monteiro.

The memorandum has been made a detailed one because the Embassy in Rio has reported little so far as to the progress and results of the Hoover–Curtice Mission and Mr. Curtice’s remarks constitute the first full picture from any point of view which is available. Mr. Curtice said that the Embassy was copying the Hoover–Curtice memorandum and that this would shortly be sent to the Department.

  1. Gen. João Carlos Barreto, President of the Brazilian National Petroleum Council.
  2. James V. Forrestal was appointed Secretary of Defense in July 1947 and took the oath of office in September.
  3. Secretary Marshall was in Rio de Janeiro at this time as head of the American delegation to the Inter-American Conference for the Maintenance of Continental Peace and Security. For documentation on this Conference, see pp. 1 ff.