Office of the Historian

832.51/2227: Telegram

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

Washington, October 27, 1943—6 p.m.

4013. For McCormick from Munro. Your 5027.35 Regret we36 cannot accede to change of interest agreement of October 16 which was in our opinion a very considerable compromise under our original views of proper distribution.

While we did agree to distribution of amortization to meet British insistence, we feel we cannot under any circumstances justify differentiation [Page 782] as to interest payments between dollar and sterling bonds.

We consider any representation that credit of Brazil will be enhanced by more favorable treatment to banker-held loan is absolutely contrary to fact and certainly would receive widespread unfavorable public comment here.

Phillimore’s statement with respect to Brazil’s looking ridiculous in London’s financial circles is, in our opinion, purely a trading plea. We believe market for future Brazilian loans much more likely to open up in New York before it does in London. [Munro.]

Stettinius
  1. Telegram of October 26, not printed; it reported British dislike of option A of the October 16 understanding, and indicated that Brazil was considering the desirability of a last-resort plan of interest redistribution.↩
  2. The Foreign Bondholders Protective Council, Inc.↩