611.32/10–950

Memorandum of Conversation, by the Secretary of State

secret

Subject: US Relations with Brazil

Participants: The Ambassador of Brazil, Mr. Mauricio Nabuco
The President
The Secretary of State

This meeting was held at the Ambassador’s request and was attended by the Ambassador, the President and the Secretary of State.

The Ambassador, after expressing his gratification over the events in Korea and giving the President the latest returns from the election in Brazil, raised three points. These points, he said, related to the Ambassador’s concern about relations between the US and Brazil which were not at the high point which he believed should be their normal condition. These three points which he mentioned were said by him to be the principal sources of difficulty.

The Senate Committee Report on Coffee. The Ambassador related the story of the sub-Committee report and of the subsequent action of the full Committee, including Senator Lucas, in supporting the sub-Committee’s criticism of Brazil and the coffee countries. He said that the report contained what amounted to a declaration of economic warfare on Brazil in urging that no loans should be made to Brazil and that loans should be made to other countries which were competitors of Brazil.

I pointed out that the Sub-Committee had made its report without going over the matter with the Department as it had promised to do and brought to the attention of the President and the Ambassador the strong statements made by Assistant Secretary Miller before the Committee. The Ambassador expressed his appreciation of the Department’s action but went on to say that he was afraid that the next step might be action of the Senate as a whole on legislation which would further complicate the matter. The President assured the Ambassador that no action could be taken by the Congress except with the President’s approval and that he would not approve any action of the type described by the Ambassador. The President stressed the fact that this Government had always had and had now a unique and special relationship with Brazil and that Mr. Truman, who shared that attitude fully, could reassure the Ambassador that nothing detrimental to Brazil was going to be done. The Ambassador expressed his thanks.

The Two Cruisers. The Ambassador said that some time ago it had been agreed between the two Governments that the US was to sell two cruisers to Brazil and that Brazil had transmitted the money here to pay for them. However, the matter had run into difficulty and [Page 775]no progress was being made. President Dutra was most eager that the transfer be made while he was in office, which would be until the end of January 1951. The President asked me what the difficulty was and I replied that I had not known of any difficulty but that the matter would be immediately investigated and a full report made to the President. The President requested that the transaction should go through as planned and he would like to have a report on the matter as soon as possible.1

Loans to Brazil. The Ambassador said that in the last few years Brazil had been able to get loans of $140 million from the US, but that of late all sorts of difficulties seemed to have arisen and no progress had been made. He said he was sure some of the difficulty was on the side of Brazil but he could not believe that it was all there. He spoke of the fact that both Argentina and Mexico had within the short space of one month been able to negotiate loans in both cases of $150 million. It was pointed out that Brazil had been criticized for not preparing adequate plans and submissions and had replied that if a line of credit were opened so that it could finance the preparation of plans it would be greatly aided. This, however, had been impossible in the case of Brazil, whereas it was the procedure followed in the case of Mexico. I said that the course of the Brazilian negotiations had been both baffling and exasperating from the Brazilian point of view due to apparent changes of view as to whether the Brazilians should go to the Export-Import Bank or the International Bank.

The President told the Ambassador he would take a personal interest in their problems and asked him to resubmit his requests. The President asked me to keep him advised on these matters. The President hopes that progress can be made very speedily with these applications.

Will the Department advise me as to the next steps which we should take.

D[ean] A[cheson]
  1. Documentation on U.S. policy regarding the sale of naval vessels to the American Republics is scheduled for publication in volume i.