800.8830 Brazil/162
Memorandum by the Economic Counselor of Embassy in Brazil (Donnelly) to the Ambassador in Brazil (Caffery)44
Subject: Allocation of shipping space for the movement of cargo from the United States to Brazil.
The shipping situation between the United States and Brazil is so serious as to justify a brief review of the problems involved and suggestions for correcting them. It is evident that unless measures are adopted at once to facilitate shipments of products essential to the economy of Brazil it will be difficult to avoid a curtailment of wartime industrial activities, the continuing threat of suspension of publication [Page 725] of newspapers friendly to the United States and United Nations’ cause, restriction in operations of strategic railways, and a further reduction in the consumption of gas in the cities of Rio de Janeiro and São Paulo. The falling off in shipments of essential products in contrast with the increase in allocations of shipping space for special projects, Lend Lease, Rubber Reserve, etc., unless arrested will further complicate the situation here.
The Department informed the Embassy in June of 1942 that the War Shipping Administration had established a monthly shipping allocation of 98,000 cargo tons for Brazil and to submit a breakdown each month of the merchandise to leave the United States for Brazil within the 98,000 ton figure. The Bank of Brazil has been furnishing this information since June and the Embassy has forwarded it to the Department. The goal of 98,000 tons monthly has not yet been reached, and according to statistics furnished by the office of the War Shipping Administration here the maximum in any one month was 86,000 tons in January, 1943 and the low was 49,238 tons in November, 1942. The information also shows that cargo shipping from the United States to Brazil from August to December 1942, inclusive, averaged 69,074 tons a month.
It is stated that there is a backlog of approximately 400,000 tons of merchandise in the United States for shipment to Brazil, including approximately 200,000 tons of coal. Of the remaining 200,000 tons, approximately 100,000 tons consist of products essential to the economy of this country. The Brazilian authorities have indicated a willingness to reduce the backlog to a very low figure, and have suggested that we give preferential treatment to cargo regarded by them as of vital importance to Brazil’s economy, and if possible that we assign special ships to transport the cargo to Brazil from the United States outside of the monthly allocation of 98,000 tons. This suggestion was made by Dr. Andrade Queiroz, who has informed the Bank of Brazil that it is the wish of President Vargas, and also by the Director of the Carteira de Exportação e Importação of the Bank of Brazil.
We strongly recommend that the Department, the War Shipping Administration and the Board of Economic Warfare give immediate attention to the possibility of a temporary increase in the cargo space for the transportation of that backlog which is classified as essential. It is of the utmost importance that the allocation of 98,000 tons be maintained and it is suggested that in view of the heavy inroads on this tonnage by special projects, Lend Lease, Rubber Reserve, etc., that consideration be given to the possibility of transporting part of the equipment for these projects outside of the 98,000 ton figure.
- Copy transmitted to the Department by the Ambassador in his despatch No. 10331, March 4, 1943; received March 10.↩