The Secretary of State to the Chargé in Brazil (Key)
Sir: There is enclosed, for the Embassy’s information and use, a memorandum1 prepared in the Department which summarizes certain thoughts in regard to Brazilian petroleum development. The Ambassador and other members of the Embassy staff who have been dealing directly with the petroleum problem are, of course, fully aware of the points discussed in the memorandum and have brought them out [Page 357] in their conversations on the subject with Brazilian officials but it is believed that the memorandum will be useful in serving as a guide to other members of the staff who are not so fully informed concerning the problem.
The Department is of the opinion that large-scale petroleum development in Brazil is to that country’s own manifest interest in many particulars and that there is little chance of its being achieved except by the participation, under satisfactory conditions, of foreign capital. It feels that some of the opposition which has been shown in various Brazilian circles, notably among high officers of the Brazilian armed services, to the enactment of legislation which would enable foreign participation in Brazilian petroleum development may well be due to inadequate knowledge of the factors involved.
The Department suggests the possibility that members of the Embassy staff and representatives of other United States Government agencies in Brazil, including American members of the Joint Brazil–United States Military Commission, could discreetly help to overcome some of the misapprehensions as to the petroleum situation which may exist among Brazilians, both official and unofficial, with whom they have friendly relations. You are consequently authorized, in your discretion, to bring the contents of the enclosed memorandum to the attention of such persons as background for such conversations as they may have on this subject. It should, of course, be understood that access to the memorandum should be restricted to United States Government officials.
Very truly yours,
Director, Office of American Republic Affairs