Office of the Historian

820.2333/12–2854

Memorandum of Conversation, by Sterling J. Cottrell of the Office of South American Affairs

confidential
[Washington,] December 28, 1954.

Subject:

  • Coffee situation.
  • Participants: Mr. João Carlos Muniz, Brazilian Ambassador to the U.S.
  • Mr. Egydio da Camara Souza, Economic Minister, Brazilian Embassy
  • Mr. Maury Gurgel Valente, First Secretary, Brazilian Embassy
  • ARA—Assistant Secretary Henry F. Holland
  • E—Assistant Secretary Samuel C. Waugh
  • OMP—Mr. Willis C. Armstrong
  • OSA—Sterling J. Cottrell

Ambassador Muniz presented a note which, he said, he had been instructed by the Foreign Office to discuss with Mr. Holland, Mr. Waugh, or the Secretary, in his discretion. The note referred to very unfavorable reaction in Brazil if the U.S. Congress were to place coffee under the Commodities Exchange Authority. The note and Ambassador Muniz’ explanatory remarks indicated that the Brazilians felt this action would be unnecessary, discriminatory, inopportune, and untimely, since the Rio Conference had succeeded in establishing a fairly satisfactory atmosphere, and possibly a violation of the resolution1 [Page 665] adopted at Rio to establish a special committee to study the coffee situation. The Ambassador explained that a unilateral act on the part of the U.S. to control the coffee market would be contradictory to the multilateral agreement reached at Rio to work out this problem under the framework of the OAS.

The Ambassador was informed that in our view the resolution at Rio could not be construed as limiting the rights of Congressional committees to make any recommendations they see fit. However, Mr. Waugh said that he intended to see Senator Capehart on another matter and would be glad to provide the Senator with a copy of the resolution reached at Rio. Mr. Armstrong undertook to inform appropriate members of the Beall Committee2 of this resolution.

In the discussion it was the general understanding that the Beall Staff Committee was now preparing its report but that it would not be submitted to the full Committee until some time in February. After that there would be hearings prior to any legislative action by the U.S. Congress if the Beall report recommended legislation.

The Ambassador concluded by urging that all appropriate steps be taken by the Department to inform the Beall and Capehart Committees of the anticipated repercussions from coffee-producing countries if legislation were introduced to place coffee under the Commodities Exchange Authority. During the meeting Ambassador Muniz was called to the ’phone and then reported that Mr. Paraguaná had just received a telephone call from Minister Gudin, asking for a decision from Secretary Humphrey concerning a standby loan for Brazil. The Ambassador said that Minister Gudin, on the basis of his conversations with Secretary Humphrey in Rio, was hopeful of a favorable answer. Mr. Holland said he would look into this matter for him.

  1. Reference is to Resolution ES–Res. 34/54, approved Dec. 1, 1954; for text, see Report of the United States Delegation to the Meeting of Ministers of Finance or Economy of the American Republics as the Fourth Extraordinary Meeting of the Inter-American Economic and Social Council, November 22 to December 2, 1954, Quitandinha, Brazil (Washington, 1954), Appendix 6, p. 14.↩
  2. Apparent reference to the Senate Committee on Banking and Currency’s Special Subcommittee to Investigate Coffee Prices. The Special Subcommittee was established in January 1954, with Senator J. Glenn Beall (R.–Md.) as Chairman, and it subsequently held hearings.↩