832.51/1621: Telegram
The Acting Secretary of State to the Ambassador in Brazil (Caffery)
223. Embassy’s 392, November 10, and despatch No. 2003, November 3.33 The Brazilian Government has repeatedly assured us that the dollar debt would receive consideration before any other Brazilian foreign debt and that in any settlement it would receive terms at least as favorable as those extended to the creditors of any other nationality. This remains, of course, our expectation. The Department assumes that as and when you may find it necessary to recall statements to this effect by the Brazilian Government you will do so and will make completely clear the fact that any settlement with investors of other nationalities that ignored the dollar debt or had as a direct or indirect consequence discrimination against the holders of the dollar debt or unjust terms would of course create great criticism here.
The Department is ready to discuss the matter of resumption of debt service with the Brazilian Government.
For your information only as to the request of the Minister of Foreign Affairs and the Finance Minister to you for suggestions, the Department would prefer to postpone making such suggestions for a short while. We probably will apply ourselves to the task of trying to work out an adjustment of the Colombian bonds in the immediate future and believe we will be in a better position to deal with this [Page 374] Brazilian situation then. However, of course, if there is any danger of a development seriously threatening the interests of the holders of dollar bonds, we might have to revise this plan.
Please keep the Department fully informed.
- Latter not printed.↩