832.51/2200: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 5:10 p.m.]
4681. My despatch No. 12846 of September 24 and No. 12927 of September 30.28 Despite British Council opposition, Brazilians appear receptive to our plan of regrouping, particularly as to interest distribution. The Brazilians however have requested our assistance in meeting, at least partially, British proposal regarding amortization which stipulates exceptionally heavy purchases in categories A and B. The disequilibrium is so great that American bondholders as a group might regard such proposal as inequitable.
One possible solution would be to reach an agreement as to the relative amounts of amortization to be allocated to sterling and dollar bonds respectively. Our amortization could then be allocated between categories on a qualitative basis perhaps somewhat parallel to our interest schedules. The British Council would then be able to arrange their own amortization distribution with Brazil.
[Page 776]Please request Foreign Bondholders Protective Council to express its views on this point and in regard to basic principles to be used in discussions regarding amortization.
Telegraphic reply requested.
- Latter not printed, but see the memorandum supra.↩