Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

368. Memorandum From the Ambassador to Brazil (Briggs) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)¹

Washington, October 16, 1957.

SUBJECT

• Call on President Eisenhower re Brazilian Matters

I called on the President this morning pursuant to a request made through the Department of State. My presentation of the Brazilian situation during a conversation which lasted one-quarter of an hour followed the lines of the summary contained in Embassy telegram 462 of October 4,² particularly with respect to the serious economic difficulties which will probably face Brazil in the near future, and the possibility that these difficulties may produce political disturbances and developments in Brazil basically contrary to the interests of the United States.

The President inquired whether Brazil is meeting her present financial commitments to the United States and I replied in the affirmative, adding that pursuant to the existing Export-Import Bank arrangements relief as to amortization may shortly be requested.

There was a brief discussion of coffee prospects during which I indicated that not only Brazil but other countries also have greatly increased their acreage, and that forecasters in Agriculture appear unanimous that over-production will occur within a year or two accompanied by a corresponding fall in prices. Since Brazil depends on coffee for 70% of her dollar earnings any substantial drop in coffee prices is bound to be serious. I also mentioned that Brazil is now spending approximately one-half of her coffee earnings on petroleum imports and on subsidizing Petrobras, and the other half on servicing her dollar debt.

The President asked how President Kubitschek’s economic program is going to which I replied that although progress is being made, the program is of vast dimensions and its execution is not being accompanied by successful efforts to combat inflation, which amounted to almost 30% in 1956 and is now running about 12% to 15% for 1957. In the subsequent discussion, I derived the following impressions:

1) That the President shares my belief that, notwithstanding the fact that many of Brazil’s difficulties are of her own making, it is clearly to our national interest to continue to collaborate with Brazil, to view with sympathy Brazil’s various problems, to seek by sound counsel to assist in the solution of those problems, and in general to see to it that the country maintains as even a keel as possible.

2) That the President is of the opinion that a renewed communist drive in Latin America, perhaps utilizing as a springboard Soviet technical competence as demonstrated by the satellite, is a distinct possibility and threat. (I mentioned this subject, and the President concurred.)

In conclusion, the President asked that on my return I convey to President Kubitschek a message of personal greeting and good wishes, recalling their previous meetings and correspondence concerning Fernando de Noronha.

Attached is a copy of a telegram to Embassy Rio de Janeiro concerning the questions asked by correspondents following my meeting with the President.³

1. Source: Department of State, Central Files, 832.10/10–557. Secret.
2. Supra.

3. The attached telegram, not printed, is in Department of State, Central Files, 123–Briggs, Ellis O.

   In telegram 593 from Rio de Janeiro, November 5, Briggs reported that he had called on Kubitschek that morning and conveyed to him Eisenhower’s personal greeting “as per my White House conversation October 16.” Briggs summarized the meeting in part as follows:

   “The President stated that the policy of the US with respect to Brazil had been a wise one; that despite growing manifestations of extreme nationalism the US had not altered its policy of economic assistance, and that his economic development program which proceeding according to schedule would have been completely impossible without such aid. I felt there was some implication in that he anticipates further economic assistance in order maintain rhythm his program.

   “Summing up present situation, Kubitschek reiterated fundamental policy continuing close collaboration with US, plus assurances mentioned reference telegram that his government would neither reestablish relations with USSR nor legalize local CP.” (Ibid.)