Subject: Briefing Memorandum on United
States-Brazilian Relations for Visit of Ambassador Nabuco to
President Truman on October 9.
There is attached a memorandum for the President on United
States-Brazilian relations and appended thereto a fuller exposition
of those relations and of my recommendations.
I feel very strongly that the importance of our relations with Brazil
is such that they warrant transmitting to the President the
memorandum with the attached fuller exposition of the state of our
relations. The Brazilian Foreign Minister1 and the Ambassador have
[Page 764] been increasingly
disturbed for a period of several months and it is vital to our
interests that a sympathetic and informed hearing be given to the
Ambassador. For this purpose I am recommending that, if time
permits, the President read the full exposition and the
recommendations included therein.
[Attachment 1]
confidential
Memorandum for the President
Subject: Appointment with Brazilian
Ambassador
The Brazilian Ambassador has an appointment at his request to see
you on October 9. The purpose of his visit is to discuss the
state of relations between Brazil and the United States. We
believe that very much good can come from your seeing the
Ambassador and giving him a sympathetic hearing as he feels that
the state of relations between the two countries has
deteriorated to an alarming extent. While the Department does
not concur in his view, it is the view of many Brazilians,
including people prominent in Government and political circles,
and it is shared by some Americans. The Ambassador also
doubtless reflects the feelings of Foreign Minister Raul
Fernandez who has been critical of the United States in recent
months although continuing to give us excellent support in
fundamental long-range problems such as the UN and procurement of strategic
materials. Ambassador Nabuco is proud of his record of
friendship with the United States which dates back to the time
when his distinguished father2 was the first Brazilian Ambassador
to the United States, The Foreign Minister also has a
long-standing record of friendship for the United States.
There is attached a full exposition of current, United
States-Brazilian relations which, if time permits, we recommend
strongly that you read. The exposition includes a statement of
recommendations enlarging upon those below.
background
Briefly, the Brazilians complain that we have failed to give them
sufficient financial assistance; that their role as the only
Latin American country to send ground troops to Europe in World
War II has not been sufficiently recognized; that Brazil is
being neglected at a time when the United States is pouring
money into Europe and Africa; and that the United States is
seriously endangering its historical and traditional friendship
with Brazil by taking its friendship [Page 765] for granted without, at the same time,
paying due heed to Brazil’s legitimate interests.
The Department is fully aware of the Brazilian complaints and is
taking all possible steps to correct misunderstandings and to
assure the Brazilians of our desire to maintain and strengthen
close relations.
recommendations
It is recommended that you receive Ambassador Nabuco in the
company of the Under Secretary of State3 and that you give him
a thoroughly sympathetic hearing but that no commitments be
made.
It is further recommended that you express to the Brazilian
Ambassador our serious concern that relations between Brazil and
the United States should be maintained on the traditional basis
of friendship and good will. You should also stress that the
United States has a special interest in relations with Brazil
and that Brazil will always occupy a unique position in our
foreign policy4 and
in the personal affections and feelings of our citizens; that we
are profoundly aware of Brazil’s great contributions during the
last war and of its support of our position in the UN; and that we view with great
satisfaction the progress that has been made along democratic
lines in Brazil during the regime of President Dutra. It would
also be well to express your personal appreciation for the
contribution towards friendship between the United States and
Brazil made by President Dutra, Foreign Minister Raul Fernandes,
and Ambassador Kabuco.
[Attachment 2]
confidential
United States-Brazilian Relations
background
The Brazilian Ambassador has expressed the view over the last
several months that United States-Brazilian relations have
deteriorated to an alarming extent. While the Department does
not concur in this view, there is no question that it is the
view of many Brazilians, including people who are prominent in
government and political circles in Brazil. It is also shared by
some Americans. It is a view that must be faced frankly and
dealt with on a constructive basis. Ambassador Nabuco is proud
of his record of friendship with the United [Page 766] States which dates back to the
time when his distinguished father was the first Brazilian
Ambassador to the United States.
The following are some of the factors which are of importance in
shaping the attitude of Ambassador Nabuco and other Brazilian
leaders:
1. Financial Assistance:
The Brazilians feel that they have not been given sufficient
attention in this regard. The record shows that since January 1,
1949 loans amounting to $140 million have been extended to
Brazil by the Export-Import Bank and, with our full support, by
the International Bank. Other Brazilian projects are in an
advanced stage of consideration. Nevertheless, the Brazilians
feel that they have not been given adequate treatment. There is
much to be said on both sides. In particular, Ambassador Nabuco
because of his political connections in Brazil, has been
interested in the application filed with the Eximbank in 1949 by the State
of Minas Gerais with regard to an $80 million development
project. After over a year of consideration in the Eximbank, it was finally
determined in the NAC that the
application should be referred in large part to the
International Bank. There is no question that the Minas Gerais
application was inadequately drawn up and has not been
aggressively pursued by the Brazilians. Also they did not
consult with the Department of State in the first instance as to
whether the application should go to the Eximbank or the International
Bank. Nevertheless, the fact is that much too much time has been
spent without coming to a conclusion on this issue. At the same
time, the Brazilians have seen the relatively rapid conclusion
of the Argentine and Mexican loan negotiations and they cannot
understand why the Minas Gerais application should after a year
be referred to the International Bank when the Eximbank announced a large
credit for general development purposes to Mexico.
As much as we may disagree with the thesis that our friendship
for Brazil should be measured in terms of dollars and inadequate
though the work of the Brazilian Government has been with regard
to presenting applications for loans—certainly as compared to
Chile and Mexico—this is nevertheless an important problem and
the Department of State has certain constructive recommendations
about dealing with it as outlined below.
2. Personality of the Foreign
Minister:
An important element in the picture between Brazil and the United
States is the personality of Dr. Raul Fernandes, the Brazilian
Foreign Minister. Dr. Fernandes is a man of enormous prestige in
Brazil with the reputation of being outstandingly pro-American.
He is greatly admired by Dutra5 and in the
event of the election of Dr. Christiano [Page 767] Machado, the Presidential candidate of the
Government party in the elections just held, Fernandes might
continue as Foreign Minister. Dr. Fernandes has tended recently
to be increasingly bitter towards the United States primarily in
regard to the question of financial assistance. While Mr. Miller
and Mr. Kennan were in Brazil in March6 this was virtually the sole topic of
Dr. Fernandes’ discussion with them. At the same time, Dr.
Fernandes did not make any specific suggestions as to what
should be done nor did he show understanding of the importance
of Brazilian initiative and planning in regard to assistance for
economic development requested of the United States. Dr.
Fernandes showed an unrealistic concept of the nature of
assistance which the United States might lend to Brazil when,
during Mr. Miller’s visit to Brazil, he rejected with contempt
any suggestion of loans, feeling that the United States should
put its aid to Brazil on a grant basis. Dr. Fernandes’ attitude
in his dealings with Ambassador Johnson has evinced a critical
view of our policies with regard to Brazil. He has, however,
been understanding and cooperative in matters relating to the
international position and obligations of the United States.
Because of his prestige in Brazil, the possibility of his
continuation in office and his undoubted friendship for the
United States, his attitude is one which must be faced.
3.
ECA Activities:
Thinking Brazilians appreciate the objectives of the ECA program in Europe but view with
great concern the extension of ECA operations to underdeveloped areas in Africa
and Asia. They fear that our aid would lead to the stimulation
of economic activities, particularly in the agricultural field
in Africa, which will be competitive with Brazil. While we have
endeavored to put the record straight on this subject, we have
not been able to overcome suspicion of our objectives. An
increase of ECA activity in the
underdeveloped areas of Africa and Asia will create increased
problems in our relations with Brazil. The Department’s proposal
to extend assistance to South East Asia on a grant-in-aid basis,
however justifiable it may be from the standpoint of our
relations with that area, will greatly magnify the problem.
4. Military Assistance:
Brazil feels that since the war it has been treated as a
stepchild in regard to military assistance as well as financial
assistance. Brazilians are extremely proud of the fact that
theirs was the only country in Latin America which sent ground
forces abroad in World War II. One of the reasons why that
division was sent abroad is because of Brazil’s aspirations to
be looked upon and treated by us as a great power. [Page 768] Nevertheless, since
the end of the war they do not feel that we have given them
enough arms. In fact, the exclusion of Latin America from the
military assistance program7 is
a sore in the side of Brazil.
5. Gillette Report:
The investigation of coffee prices by the Gillette
Subcommittee8 of the Senate Committee on Agriculture
and Forestry and the report issued by that committee has caused
intense indignation in Brazil and is resented deeply and
bitterly, and with good reason, by the Brazilian Government and
people. The fact that Senator Lucas, the Majority Leader, formed
a part of the subcommittee makes it look to the Brazilians like
an Administration document and it is extremely difficult to
explain to them that Senator Lucas’ participation was a formal
one. The fact that Assistant Secretary Miller appeared before
the committee in June9 to object
to many features of the report, including outrageous references
to Brazil, alleviated the situation to some extent, but the fact
that the full commitee ultimately adopted a revised report10 by a unanimous vote undid
much of the good that had been done by the State Department’s
position. Even though the final report contains no
recommendations which will be harmful to Brazil, the Gillette
Subcommittee has become symbolic in the minds of the Brazilians
as an official group in this country which is against coffee as
such and therefore against Brazil.
6. Election Campaign:
An important factor in the development of the present state of
mind in the Brazilian Government has been that the country has
been in an election campaign for the last year. The Dutra
administration, although it has faithfully and courageously
observed constitutional democratic processes, has not been
aggressive or effective in developing a program for obtaining
United States assistance for the implementation of economic
development schemes. Preoccupation with the election campaign
has had the indirect effect of virtually paralyzing many of our
discussions with Brazil. Furthermore, the inability of the two
more conservative parties, the UDN and the PSD, to
unite on a coalition candidate has caused a feeling of
frustration on the part of Brazilians of those parties,
including, of course, the Foreign Minister and the Ambassador.
It is presently impossible to [Page 769] predict who will win the presidency but it
should be added that, in the opinion of the Department,
U.S.-Brazilian relations would not be adversely affected by the
return of Getulio Vargas from whom we received outstanding
cooperation during World War II even at a period in 1941 when
things looked extremely black for the allies and he personally
took the decision to give us air bases on Brazilian territory.
The Department believes that much of the writing in the American
press about Vargas and his alleged enmity towards the United
States has been inspired by political opponents of Vargas. The
Department also believes that if Vargas should win he will take
office despite his unpopularity with a substantial part of the
Army, and it is also felt that precisely because of the Army’s
pride in democratic progress in recent years Vargas would, if
elected, be unable and unwilling to reestablish a dictatorship.
The election was held on October 3 and the results should be
known within a few days. It may be anticipated that with the
election over it will be possible for us to make more progress
in working out our mutual problems.
7. Status of Treaty
Talks:
None of the proposed treaties referred to in the joint
statement11 of the Presidents of the United States and of
Brazil released during the visit to the United States of
President Dutra has been concluded. The following is the status
of proposed treaties: a Cultural Convention should be ready for
signature within a few weeks; the Brazilians are holding back on
a draft of a Treaty of Friendship, Commerce and Economic
Development; further discussion of a Joint Guaranty Fund has
been held up pending discussion in the Congress of the
investment guaranty provisions of the Point IV program; and the
Department is hoping to make arrangements for a Treasury
representative to visit Brazil soon to discuss matters relating
to a Double Taxation Treaty. The Brazilians attach special
importance to the two latter treaties, while we would prefer to
have the FCED Treaty concluded
first.12
8. Psychological Factors:
Overriding every other factor in U.S.-Brazilian relations is the
psychological factor. Brazil has always aspired to a special
position in U.S. foreign policy and it feels that it has earned
this special position through its undeviating record of
friendship for the United States. Many Brazilians feel that,
particularly since the war, we have not accorded a special
position to Brazil. They resent our preoccupation with Europe
and Africa and our alleged concurrent neglect of Brazil. They
harbor suspicions that we are deliberately supporting [Page 770] European colonial
powers whose tropical territories are potential competitors of
Brazil. Paradoxically, Brazilians also view our Latin American
policy with considerable distaste as they feel that we tend to
think in Pan American terms, putting Brazil on the same plane
with the rest of Latin America. Thus, even though Brazil has
been a faithful participant in OAS activities, they object to the “leveling”
process that is an inevitable concomitant to the structure
provided for in the Rio and Bogotá treaties. This psychological
factor poses us an insoluble dilemma.
recommendations
It is recommended that you receive Ambassador Nabuco in the
company of the Under Secretary of State and that you endeavor to
make the following points during the conversation:
- 1.
- That you express to the Brazilian Ambassador our
serious concern that relations between Brazil and the
United States should be maintained on the traditional
basis of friendship and good will between the two
countries. You should also stress that the United States
has a special interest in relations with Brazil and that
Brazil will always occupy a unique position in our
foreign policy and in the personal affections and
feelings of our citizens; that we are profoundly aware
of Brazil’s great contributions during the last war and
of its support of our position in the UN, and that we view with
great satisfaction the progress that has been made along
democratic lines in Brazil during the regime of
President Dutra. It would also be well for you to
express recognition of Ambassador Nabuco’s own personal
contribution towards friendship between the U.S. and
Brazil.
- 2.
- You should point out that the Administration’s
attitude toward the Gillette Report was made clear in
the public statements of Secretary Acheson and Assistant
Secretary Miller.
- 3.
- You should strongly urge that the most constructive
approach to the whole situation would be to let bygones
be bygones and concentrate on working out a positive
future program of cooperation. Some of the points which
the Department has been considering and which could be
mentioned are as follows:
-
a)
- The sending of a strong mission to Brazil on
January 3, 1951 to attend the inauguration of the
new President, whoever he may be. It is suggested
that consideration be given to requesting
Secretary Sawyer as well as Assistant Secretary
Miller and appropriate military representation. A
separate memorandum on this matter will be
furnished you prior to the inauguration.13
-
b)
- The Department is giving attention to the
problem of Brazil’s military requirements.
-
c)
- The Department is now trying to make
arrangements for a long-range program of economic
cooperation with Brazil. While we have very
serious reservations over an apparent [Page 771] tendency on
the part of some Brazilians to measure the degree
of our friendship according to the amount of loans
which we extend/there is no doubt that in our own
self-interest we could show Brazil the way to
working out a more positive and dynamic program of
development. Before Brazil can move forward in
this direction, however, it is essential that they
know what we are are prepared to do for and with
them. As a first step we are now discussing with
Brazil the creation of the first Joint Commission
for Economic Development provided for in Section
410 of the Act for International Development.14 It will be the function of this
commission to go into means of implementing
Brazil’s economic development program. However,
before that can be done it is essential that the
National Advisory Council make some determination
of Brazil’s borrowing capacity over a five-year
period and allocate the amount so determined as
between the International Bank and the Eximbank. Doubt as
to the respective functions of these two agencies
has caused some confusion and has undoubtedly
slowed up development activities in Brazil. The
International Bank has informally advised Brazil
of its willingness to move forward with a
substantial investment program over the next few
years, but the Bank has had doubts over moving
ahead until it knows what the role of the Eximbank is going to
be in relation to Brazil. We plan to discuss with
Secretary Snyder at an early date the necessity of
proceeding with plans along this line. In this
connection it is of interest that both Mr. Eugene
Black of the International Bank and Mr. Lynn
Stambaugh of the Eximbank15 are planning to make visits to Brazil
in the near future.
- 4.
- Finally, we believe it would be most fitting if you
would state to Ambassador Nabuco your own pleasure over
the satisfactory evolution of Brazil along democratic
lines and your esteem for President Dutra, Foreign
Minister Fernandes, and the Ambassador.
