Office of the Historian

832.5151/994: Telegram

The Secretary of State to the Ambassador in Brazil (Caffery)

Washington, February 3, 1938—8 p.m.

21. Your telegram No. 8, January 14, 7 p.m., and previous and Department’s telegram No. 100, December 30, 1937, 6 p.m. The Department recognizes that the arrangement reported in your telegram No. 8 between the Bank of Brazil and the American Chamber of Commerce for Brazil and as extended (your telegram No. 22, January 29, 1 p.m.9) represents an improvement over the situation immediately prior thereto. However, as stated in the Department’s telegram No. 100, it is of the opinion that the undertaking of the Government of Brazil in the Brazilian Ambassador’s note of February 2, 1935,10 entitles this Government to expect that the necessary exchange will be made available for payments, when due, for all imports from the United States. Therefore, unless you perceive objection, you should communicate the following or the sense thereof (informally) to the Foreign Minister:

The Department appreciates the circumstances which prompted the Government of Brazil to take steps on December 24 last to impose restrictions upon foreign exchange operations, and the efforts of the Brazilian Government and the Bank of Brazil since that date to solve the present exchange difficulties have been followed with sympathetic interest. Nevertheless, the Department has always placed great reliance upon the undertaking of the Brazilian Government, contained in the note of the Brazilian Ambassador appended to the trade agreement, that the necessary exchange would be made available for payments, when due, for all imports from the United States.

The Department therefore hopes that Government of Brazil may soon restore the exchange situation to a basis consistent with the above mentioned undertaking of February 2, 1935. In this connection, it would be especially helpful to American trade at this time if an announcement could be made by the Brazilian Government of the adoption of a policy which would eliminate the existing uncertainty as to when dollar exchange will be allocated for past imports not already covered, as well as tor current imports.

Please continue to keep the Department informed by telegram of developments in this situation.

Hull
  1. Not printed.↩
  2. Foreign Relations, 1935, vol. iv, p. 340.↩