632.006/12–844
The Chargé in Brazil (Donnelly) to the
Secretary of State
No. 19088
Rio de Janeiro, December 8,
1944.
[Received December 14.]
Sir: I have the honor to attach copy of a
memorandum prepared by a member of the Embassy staff concerning the
possible issuance of a decree controlling imports into Brazil.
I immediately called this matter to the attention of the Minister of
Finance who said the decree had not been signed and that he would
discuss it fully with me next week (when he returns from São Paulo). I
pointed out to the Minister that the new measure would conflict with the
Brazilian-American trade agreement.
Respectfully yours,
[Enclosure]
Memorandum by the Senior Economic Analyst of the
Embassy Staff (Davidson) to the
Assistant Commercial Attaché (Childs)
Rio de Janeiro, December 8,
1944.
Subject: Proposed Decree Controlling Imports into
Brazil.
Beyond the information I gave you yesterday concerning the subject
decree, I have learned today that this proposition has been approved
by President Vargas, was passed back to the Ministry of Fazenda, and
has now been returned to the Carteira in order that definite lists
of those commodities to be controlled can be drawn up
[Page 668]
It is understood that the
Carteira intends to include in this list everything appearing under
Schedule B and some additional non-specified items. As I suggested
yesterday, the probable import of such a plan lies in the complete
control over all goods to be imported into Brazil (as this decree,
if passed, would necessitate the obtention of permission to place an
order in a foreign country rather than the present partial control,
where exchange can only effectively be refused on applications for
exchange against letters of credit) and the resulting possibility of
discrimination is quite evident.
It was further learned that Sarmanho is planning to return to Brazil
in the very near future with his plan for the freezing of Brazil’s
present dollar credit balances further perfected and with full
intention of forcing the issue through if possible. Sarmanho’s plan,
as I understand it, entails the reservation of all present dollar
credits for the purchase of certain capital goods which will be
essential in the furtherance of Brazil’s plans for
industrialization. It is understood that normal import business
would have free access to all exchange resulting from export
negotiations subsequent to the effective date of freezing present
credits.
I am told that Souza Costa is not in favor of the above plan put
forward by Sarmanho.
