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

832.2311/4–154:Telegram

The Ambassador in Brazil (Kemper) to the Department of State

secret
priority

Rio de Janeiro, April 1, 1954—1 p.m.

754. For Secretary from Ambassador. Reference Department’s telegram 684, March 31.¹

When in Washington discussed with General Smith and others exchange of wheat for monazite and thorium which looked like good arrangement particularly because it would settle present dispute with Brazilian Government regarding US obligation under exchange of notes February 1952. Thus far Foreign Office and Finance Minister reject barter idea claiming it would open up demands from all quarters for similar arrangements. Should think New York banks would be willing finance purchase up to 300,000 tons 18 months particularly in light substantial improvement Brazilian financial position stemming largely from advance in prices coffee and cocoa. Someone in administration undoubtedly could set this up with New York banks without difficulty. Both wheat sale and settlement dispute on purchase monazite would be most helpful² present major negotiations with Brazilian Government on uranium.³

Kemper

1. The referenced telegram, addressed for Ambassador Kemper from the Secretary, drafted by Mr. Atwood and cleared in substance with Mr. Waugh, reads as follows: “I am discussing alternative methods making 100 to 150 thousand tons of wheat available for cruzeiros and/or strategic materials. This should not be discussed Brazilians this time. Please don’t encourage straight credit idea.” (832.2311/3–3154)

2. Telegram 686, to Rio de Janeiro, dated Apr. 1, 1954, addressed for the Ambassador, reads in part as follows:

   “Department agrees important settle dispute purchase strategic materials urtel 754 but not aware possibility settlement if isolated from wheat sale contemplated arrangement discussed by you Washington.” (832.2311/4–2254)

3. In telegram 732, to Rio de Janeiro, dated Apr. 22, 1954, the Department notified the Embassy that the Office of Defense Mobilization agreed to authorize the use of its funds for the purchase of monazite and rare earth derivatives in exchange for U.S. wheat, and instructed the Embassy to inform the Brazilian Government that the United States was prepared to negotiate an appropriate contract in Washington or Rio de Janeiro (832.2311/4–2254).