832.51 Bank of Brazil/1: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 2:50 p.m.]
219. During recent visit of Pierson, President of the Export-Import Bank, he examined at close range the effect of the exchange difficulties of the Bank of Brazil upon American trade. The Bank at that time indicated that if it were able to obtain a credit from the Export-Import Bank it would be willing to guarantee that it would utilize the exchange derived therefrom exclusively for American imports and would be able to guarantee immediate exchange cover for all merchandise of American origin.
I am now in receipt of the following telegram from Pierson:
“I am willing recommend Export-Import Bank credit to Banco do Brasil to be utilized exclusively to provide exchange American imports. Believe should be limited to 12 months or at most 18 and payable in regular installments. Would want unconditional guaranty of Banco do Brasil and perhaps part collateral if amount is large. If [Page 357] Ambassador approves I shall cable Export-Import Bank to discuss with State and Treasury. Am convinced after visit to Argentina and Uruguay that this approach is best possible method to prevent further loss of business to European countries. Leave Buenos Aires tomorrow for Santiago.”
I have informed Pierson that I have no objection to the Export-Import Bank discussing this matter with the Departments of State and Treasury.
The exchange situation of the Bank of Brazil is far from satisfactory and I am convinced that unless the Bank receives some assistance it will be forced to adopt measures tending further to restrict imports.
Please inform the Department of Commerce.