832.50/11–2849
Memorandum of Conversation, by the Officer in Charge of Brazilian Affairs (Clark)
| Participants: | Assistant Secretary Miller |
| Ambassador Mauricio Nabuco of Brazil | |
| Mr. Antonio Borges Leal Castello Branco, Second Secretary, Brazilian Embassy | |
| Mr. DuWayne G. Clark, EC |
On Friday, November 25, the Brazilian Ambassador, at his request, called on Assistant Secretary Miller at 5 p. m. The Ambassador explained that he was calling to welcome the Assistant Secretary back after his trip to the West Coast countries and he also stated that he wanted to tell the Assistant Secretary in a general way of a speech which the Brazilian Ambassador to the U.N., Cyro Freitas Valle, will make before the Pan American Society in New York this week. The Ambassador stated that Freitas Valle will discuss rather pointedly the fact that at least a certain proportion of the ECA financing which is going to European countries is, in turn, being diverted to the development of Africa and that this development is directly competitive with Brazil. The Ambassador stated that he realized that this was not a new thought but that it is a matter which is very much in the minds of many of the Brazilian officials.
The Assistant Secretary pointed out to the Ambassador that Ambassador Freitas Valle has been of tremendous assistance to our U.N. Delegation and that we are very grateful to him. He said that his rather sudden departure for Brazil on December 3rd had made it impossible to complete plans for a rather large luncheon which the Assistant Secretary had hoped to give for Freitas Valle before he left this country. As regards his proposed speech in New York, the Assistant Secretary emphasized that, whereas the ECA help for European and certain other countries is of a temporary character, our interest in Latin American development is in no way prejudiced but that we visualize this development as a long range and permanent policy, not an emergency gesture. The Ambassador stated that he understood this situation very well and that he often thought that perhaps most Latin American countries, Brazil included, were not able to absorb financial help as fast as this country might be willing to grant it.
Ambassador Nabuco reported that, while the matter is going very slowly, he has every confidence that Brazil’s request for financial [Page 584] assistance of the International Bank in connection with the development of the São Francisco power project will result favorably. He stated that he had at various times explained to his Government that the rather slow process in Washington was no indication of sentiment and that its very character might be advantageous. He emphasized that once either the International Bank or the Eximbank has committed itself to a proposal there is little question but that the proposal will be completed regardless of any change in government which may take place in the benefitting country.
The preliminary conversations with Octavio Bulhões, the Brazilian representative of the Ministry of Finance, were reviewed for the Ambassador and he was asked whether it was true, as had been suggested by Bulhões, that the Brazilian Government would be unwilling to allow material progress to be made in the discussions covering the proposed joint guarantee plan, as well as the draft of a treaty of commerce, economic development, and friendship, so long as the authorities of this Government could not indicate how far we might go towards granting special concessions under a proposed double taxation treaty.1 It was pointed out to the Ambassador that the concessions in which Brazil seems to be interested, that is, an idea that profits remitted to this country from Brazil should not be subject to the full income tax schedule, was something that would require Congressional action and would be multilateral in character. The Ambassador stated that he did not believe that discussions on the other agreements were necessarily contingent upon the double taxation treaty, although he did remark that in his judgment and in the judgment of many of Brazil’s leading authorities a concession on profits remitted from Brazil would be a most important point in encouraging capital to enter that country.
Before the Ambassador made his departure, he discussed with the Assistant Secretary both the unhappy situation in Panama and the prospects of the Colombian election.2 He seemed quite receptive to the Assistant Secretary’s suggestion that no immediate consultation as regards Panama was necessary.3
- According to a memorandum (not printed) of November 7 by Mr. Clark, on October 31 Mr. Bulhões had left at the Department of State two Brazilian draft proposals (neither printed), one for a joint U.S.-Brazilian guaranty scheme for dollar investments in Brazil, and the other for a proposed double taxation treaty between the two governments (711.3211/11–749).↩
- For pertinent documentation, see the compilation on Colombia.↩
- For pertinent documentation, see the compilation on Panama.↩