206. Memorandum From Secretary of State Rusk to President Kennedy1
- Your Appointment with Special Emissary of President Quadros of Brazil
You have agreed to receive President Quadros’ special emissary, Ambassador Walther Moreira Salles, who wishes to deliver to you a letter from President Quadros. The Department does not know the contents of the letter.
The Ambassador probably will mention that he is in the United States for preliminary financial talks with United States and international agencies preparatory to a visit by the Brazilian Finance Minister.[Page 428]
President Quadros is taking constructive action to deal with the financial crisis which he inherited from the Kubitschek administration. On March 13 he simplified Brazil’s chaotic foreign exchange system. This action met with quick approval, as a temporary measure, by the International Monetary Fund. Ambassador Moreira Salles has begun discussions with the Fund looking toward a full stabilization program, and has approached us concerning financial support for such a program. Brazil desires the remaining $140 million of its IMF quota, $400 million balance of payments assistance from the Export-Import Bank, and a stretch-out of payments on its $2 billion medium and long-term debt to official and private institutions here and elsewhere.
We have recognized the seriousness of Brazil’s financial difficulties and through Ambassador Cabot and Mr. Berle have made known to President Quadros our willingness to assist. Important questions, however, are still to be resolved. These include the help which Brazil can obtain from its European creditors, the completion of drawing arrangements with IMF, the budget and credit policies to be pursued within Brazil, and the measures to be used in financing Brazil’s huge coffee surpluses.
The recent moves of President Quadros in carrying out his “independent” foreign policy have raised the issue of just how far Quadros intends to go in moving Brazil away from its traditional policy of cooperation with the United States and support for the Inter-American system. This makes it desirable to couple our expressions of helpfulness with allusions to cooperative action in the mutual interest of both countries.
- Source: Kennedy Library, President’s Office Files, Brazil—Secretary 1961. Confidential. Special Ambassador Moreira Salles met with President Kennedy and Mann on March 22 from 4:50 to 5:16 p.m. No record of their conversation was found.↩