Office of the Historian

832.5151/660: Telegram

The Secretary of State to the Chargé in Brazil (Gordon)

Washington, June 21, 1935—6 p.m.

114. Your 161, June 19, 6 p.m. Considering exemption of cotton and statement in the note received by you from the Finance Minister, that the Brazilian Government does not intend to modify its fundamental point of view which is contrary to the system of compensation, Department does not believe it advisable to enter any direct protest to the Brazilian authorities at this time, but rather to watch developments most closely and to reserve its position. I believe however that it may help to limit the use of this compensation arrangement and to protect American export trade against loss if the Brazilian Government is made fully aware of the fact that the last change of policy has created uneasiness and fear lest American trade will again be put at a disadvantage. Will you therefore please see the Foreign Minister or the Minister of Finance according to your judgment, and state that the Department has instructed you to make known to him

(1)
That this most recent step has again led to the creation of uneasiness and fear lest American export trade will suffer disadvantage in Brazil.
(2)
That American interests concerned will be quick to bring pressure on this Government to protect American trade interests if such disadvantage arises, especially if the disadvantage would take the substance away from the reciprocal most-favored-nation pledges which bind the two countries, and which is embodied in the prospective commercial agreement.
(3)
That the Department has asked you to report fully and promptly all and every instance in which this compensation arrangement means the loss of orders for American interests or the displacement of American trade.

It is hoped that this will serve to keep the arrangement within strict bounds. If this does not seem to you adequately to cover the points that should be made or if the manner of proceeding which is outlined does not appear to you to be the correct one, please cable your suggestions to the Department.

Hull