832.51/1746: Telegram
The Secretary of State to the President of the Foreign Bondholders Protective Council (White)
The terms of debt service contemplated to be proposed by the Brazilian Government to cover a period of 4 years which have been transmitted through the Embassy at Rio and which have been under discussion with the Council are as follows:
(Percentages of service provided for the last year of the so-called Aranha plan of 1934)
| Grade I | Interest—50 percent; amortization—40 percent in each of the next four years. |
| Grade II | Interest—50 percent; amortization—40 percent in each of the next four years. |
| Grade III | 50 percent in each of the next four years. |
| Grade IV | 45 percent first year, 50 percent fourth year. It is not entirely clear Whether in the second and third years the percentage is to remain at 45 percent or to increase. |
| Grades V, VI, VII, and VIII | 40 percent, 41 percent, 43 percent, and 50 percent during the first, second, third and fourth years, respectively. |
The Brazilian Government would reserve the right, under numbered paragraph 6 of Article I of the so-called Aranha plan of 1934,24a to put additional amounts of funds into purchases of bonds on the market. It has been stated separately that the Government of Brazil would be prepared to devote in this manner $10,000,000 over the 4 years to the purchase of dollar bonds.
All these terms are of course strictly confidential.
- Decree No. 23829, February 5, 1934, Diario Oficial, February 7, 1934, p. 2689.↩