Memorandum by Dr. Milton Eisenhower of a Conversation With President Vargas 1


At a small reception given by President and Mrs. Vargas for the members of the Mission, President Vargas asked Doctor Eisenhower to meet with him privately. At the discussion were President Vargas, his daughter Alzira (as interpreter), Minister of Foreign Affairs Rao, Minister of Finance Aranha, the President’s brother-in-law, Walder Sarmanho, President of the National Development Bank, and Doctor [Page 627] Eisenhower. The President explained that Brazil would take action to reduce its imports by expanding the production of wheat and developing oil resources.2

(The President is not well. He speaks scarcely above a whisper.) The words he used in his explanation were almost identical to those previously expressed by the Minister of Finance and the President’s brother-in-law to Doctor Eisenhower. Indeed, Doctor Eisenhower gained the impression that these two individuals are essentially responsible for presidential policy in Brazil. President Vargas indicated that he would like to write personally to President Eisenhower, summarizing Brazil’s economic situation and explaining the actions which the government proposed to take to develop resources and achieve a balance in international trade; he also indicated a desire to send one or two members of his official family to Washington to explain these matters. Doctor Eisenhower indicated that he was sure his brother would welcome any message President Vargas wished to send. Doctor Eisenhower then went on: (1) On a purely personal basis he could say that he had great faith in the Brazilian people and in their capacity to overcome present difficulties. (2) It must be recognized that the International and Ex-Im Bank could act only on the basis of specific projects placed before them. The latter faced a difficult situation because its loans were a charge against the annual Budget and the debt of the United States; this fact was pertinent in view of the imperative necessity of reducing total public costs in the United States. (3) Matching the frankness of President Vargas and the Minister of Finance, who had referred to oil development as a “political problem”, Doctor Eisenhower indicated that it would present a political problem in the United States if Ex-Im Bank loans of substantial size were to require a recommendation for an increase in the legal debt level of the United States. (4) He urged that the misunderstandings with respect to the International Bank be overcome. The conversation ended by President Vargas indicating, again that he would write in detail to President Eisenhower. (Doctor Eisenhower gained the impression that the Minister of Finance and the President’s brother-in-law, who have so recently assumed new responsibilities wished to have time to formulate a total program, including action looking to a balance in international payments, which would be reassuring to the U.S. government and bank officials.)

  1. Dr. Eisenhower drafted this memorandum. He visited Brazil, July 22–27, 1953, as part of his factfinding mission to the countries of South America during the summer of 1953.
  2. A summary of this conversation, drafted by Chargé Walmsley, based on information related to him by Dr. Eisenhower, dated July 28, 1953, reads in part as follows: “The President said that in the matter of oil the plan, owing to difficult internal political problems, would be to let the present legislation in the [Brazilian] Congress take its course, unsatisfactory as it may be. At an appropriate time in the future (it was not clear whether this was a matter of weeks, months, or years) the Government would seek through legislation an appropriate amendment of a general nature under which contracts could be negotiated with foreign companies.” (Miller files, lot 53 D 26, “Brazil”)