832.00 TA/5–653:Telegram
The Ambassador in Brazil ( Johnson ) to the Department of State
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1538. For ARA. Embtel 1501, April 27.1 In interview this afternoon with Foreign Minister he elaborated on Brazilian Government’s views regarding termination date JBUSEDC. He gave me copy draft personal letter2 to me setting forth in detail his arguments for deferring presentation our note (Department instruction 77, April 22). A copy this draft letter has been sent Brazilian Ambassador Washington, and I understand from conversation with Cottrell May 5, has been shown officers of Department.
[Page 613]Minister emphasized vital importance which his government attaches to extension life of commission to end this calendar year.
From our gauge of responsible official and public opinion on this question, I am in agreement with Minister’s view that termination commission June 30 would be generally misunderstood here and would have damaging effect on US-Brazilian relations.
If for reasons of policy, Department reaches decision to accede to Brazilian views, it seems to me essential that we have at same time a clear-cut and precise understanding on both sides as to what is to be expected of commission when its present program is completed by June 30 and what is to be expected from US. Scope for misunderstanding in this field could be very wide and would seem to require understanding also with lending institutions who would be expected pass on financing of approved projects. If a satisfactory mutual basis of understanding for extended life commission can be found, I think it would be in our interests meet Brazilian view regarding date of termination. Vargas administration is passing through very serious crisis at present moment, which it is generally believed will end in number cabinet changes. Until peak this crisis has been passed, elements of confusion which exist in Ministry Finance and Bank of Brazil are not likely be cleared up. As early decision as practicable on question termination date joint commission favorable to Brazilian views and with appropriate mutual understandings between US and Brazil along lines above indicated would do much stabilize political position and strengthen administration’s hand.
Foreign Minister says his government is looking forward with keenest anticipation to visit Dr. Milton Eisenhower and is confident that during visit broad basis of understanding for future development our mutual interests and relations can be established.