Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

832.053/3–354

The Deputy Administrator of the Reconstruction Finance Corporation (Robbins) to the Secretary of State

confidential

Washington, March 3, 1954.

Dear Mr. Secretary: Reference is made to our letter of September 18, 1953¹ and previous correspondence with regard to the liquidation of 60,000 shares of capital stock of the Amazon Credit Bank of Brazil held by this Corporation.

We are in receipt of Dispatch No. 727 of December 7, 1953² from the United States Embassy in Brazil suggesting that the Embassy be authorized to advise the Brazilian Government that the Government of the United States will accept the Brazilian offer for payment in cruzeiros of all dividends declared but unpaid, with the reservation that with respect to dividends declared after December 19, 1951 payment would be accepted in cruzeiros, with the understanding that foreign exchange might be required at a later date.

In addition, the Embassy suggests it make known to the Brazilians our desire to receive 60,000,000 cruzeiros, or the par value of the 60,000 shares of stock, in return for the transfer to the Brazilian Treasury of such stock; that both governments leave to a more favorable occasion the question as to when and at what rate the United States would arrange, through the Bank of Brazil, for the transfer at one time or in installments over a reasonable period of time the 60,000,000 cruzeiros representing the proceeds of the sale of the stock. The Embassy also stated it believes it can support the sale of the stock at 100% of its par value in cruzeiros on the basis of per-share-earnings ratio, and yields, relating to comparable Brazilian bank stocks, in particular shares of the Bank of Brazil.

There are enclosed an original and two copies of a letter³ which we have addressed to the United States Embassy in Brazil authorizing the Embassy to proceed to negotiate with the Brazilian Government on the basis of receiving the declared but unpaid dividends in cruzeiros and sale of the stock at 100% of its par value in cruzeiros, with no reservations as to the exchange of the cruzeiros into dollar funds.

Would you please cause the original of the enclosed letter to be forwarded to the United States Embassy in Brazil, accompanied by such comments as you may care to make on this matter.⁴

Sincerely,

Laurence B. Robbins

1. Not printed (832.053/9–1853).
2. Not printed; it discussed a possible U.S. counterproposal to the Brazilian offer of payment in cruzeiros of all dividends declared but unpaid on shares in the Amazon Credit Bank held by the RFC and acquisition of the stock by the Brazilian Government at a substantial discount (832.053/7–753).
3. Not printed.

4. In instruction 18, to Rio de Janeiro, dated Mar. 24, 1954, the Department directed Ambassador Kemper to negotiate the liquidation of the U.S. Government’s shares of the Amazon Credit Bank Capital stock and accrued dividends (832.053/3–354).

   In telegram 579, from Rio de Janeiro, dated Dec. 10, 1954, Ambassador Kemper stated that he had settled the Amazon Credit Bank matter. He reported, in part, that the settlement was made “on basis full payment in cruzeiros for investment U.S. stock interest and unpaid dividends. Brazil will pay 10,000,000 cruzeiros immediately and equal amounts each month thereafter until entire debts liquidated.” (832.10/12–1054)