832.5151/1184: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
102. Your 203, August 25, 3 p.m. The following strictly confidential communication is telegraphed you at the request of the Federal Reserve Bank of New York for delivery to the Bank of Brazil:
“September 2, 1938.
Banco do Brasil,
Rio de Janeiro, Brazil.
Dear Sirs: We refer to your letter dated August 24, 1938, addressed to the American Ambassador at Rio de Janeiro.
We have been authorized by the Secretary of the Treasury of the United States to advise you as follows:
We, as fiscal agent of the United States, are prepared to receive gold sent to us from abroad by you or your government and to hold the same under earmark and deal therewith as provided in the arrangement contained in the letter dated July 15, 1937, from the Secretary of the Treasury of the United States to the Minister of Finance of Brazil, as supplemented by this letter.
Item (4) of said letter of July 15, 1937, provided that milreis shall be repurchased ‘at such times as may be mutually agreed upon when such milreis are purchased from you by us, …’34 Until further notice we are prepared to agree that any or all milreis purchased by us from you under such arrangement shall be repurchased (in United States dollars) by you from us no later than one year after the date of the purchase from you by us, at the same rate or rates of exchange at which such milreis shall have been purchased from you by us. If prior to the expiration of such one-year period you request that such date be extended for a further period of time, consideration will be given to such request.
We also agree with your request to modify the last sentence of item (4) of said letter of July 15, 1937, to read as follows:
‘In the absence of any such request milreis in the amount of such accrued interest shall be purchased (in United States dollars) by you from us at said rate or rates of exchange at the end of each successive six-month period from and after the date of the purchase of the milreis by us from you and upon the termination of this arrangement.’
We assume that your designation as fiscal agent of the United States of Brazil to enter into the arrangement contemplated by the letter of July 15, 1937, as supplemented and modified herein, will be confirmed to our Secretary of the Treasury or to us by your Government.
We will use our best efforts to make arrangements for refining on arrival for account of the Brazilian Government, such gold as may be shipped. Before we could obtain an estimate of the cost of refining, we would need to know whether the gold consists of coins or bars and the approximate fineness thereof, and, if bars, the approximate weight of each bar.
Very truly yours,
L. W. Knoke,
Vice President.”
- Omission indicated in the original.↩