295. Telegram From the Ambassador in Brazil (Kemper) to the Department of State2

643. For Under Secretary from Ambassador. Deeply concerned Gudin’s3 attitude. Think his retirement from government would open door for same sort of machinations that plagued Brazil under former administration.4 President’s reference to Caracas and Rio conferences5 and pledge of assistance to friendly nations plus continued press references to Marshall Plan for aid has caused Brazilians to ask “In what respects have we failed to cooperate and why is assistance we so desperately need being denied us?” Actually Brazil has not acted with reasonable promptness on a number of pending matters. But the heroic effort being made to bring some order out of present chaotic financial situation merits both our admiration and our assistance. Still inclined to opinion they should settle pending matters including atomic energy agreement, but shall not press matter further in view your Deptel 550.6 Have never associated this with other negotiations, but have not hesitated to mention when [Page 628] opportunity offered to all in authority because I think conclusion this agreement, if properly publicized, easily might remove petroleum situation from political arena. I, therefore, recommend: 1. That I be authorized (see Embtel 636)7 to compromise on commodities for Cruzeiros agreement within reasonable limitations on basis that will create most good will. 2. That credit bank settlement for which Gudin was criticized in Cabinet meeting be approved without further delay. 3. That wheat–minerals deal be disposed of immediately with several options offered for use of dollars not expended for sodium sulphates. 4. That I be authorized to inform President and Gudin that our rejection of Brazil’s request for stand on credit is not to be interpreted as negative attitude their needs, but rather considered judgment that day to day appraisal by our Treasury in consultation with persons elected by Gudin and in whom he has confidence is much better procedure for Brazil.

I am convinced that as goes Brazil, so will go the hemisphere. In any reversal this procedure I have outlined, Secretary and the President might wish to be informed.

  1. Source: Department of State, Central Files, 732.00/1–755. Secret.
  2. Eugenio Gudin, Brazilian Finance Minister.
  3. Reference is to the administration of former Brazilian President Getúlio Vargas. After Vargas committed suicide on August 24, 1954, Vice President João Café Filho succeeded to the presidency.
  4. Reference is to the Tenth Inter-American Conference, held at Caracas, Venezuela, March 1–28, 1954, and 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 (commonly called the Rio Economic Conference), held at Quitandinha, Brazil, November 22–December 2, 1954.
  5. In telegram 550, January 6, Under Secretary Hoover informed Ambassador Kemper that interested agencies believed that it would be undesirable to continue to associate U.S. action regarding a proposed P.L. 480 wheat agreement with Brazilian performance concerning uranium and atomic energy agreements. “Such a linkage,” he pointed out, “would (1) suggest degree of urgency our part obtain atomic energy agreements which is not now in accord with facts, (2) inject additional obstacle to disposal US agricultural surplus, (3) detract from political good will engendered by alleviation Brazilian food shortages.” (Department of State, Central Files, 832.2546/1–655) For text of P.L. 480, the Agricultural Trade Development and Assistance Act of 1954, see 68 Stat. 455.
  6. Telegram 636, January 7, contained the Embassy’s recommendations concerning the proposed P.L. 480 wheat agreement with Brazil. (Department of State, Central Files, 411.3241/1–655)