832.6170/171: Telegram

The Secretary of State to the Ambassador in Brazil (Caffery)

313. Your 283, January 29, 11 p.m.27 The following from Rubber Reserve:28

“Rubber Reserve will agree to buy all available rubber until June 30, 1944 at a base price of 39 cents f.o.b. Belém for acre fine, on a washed and dried basis, with appropriate differentials for unwashed types and lower grades.

“The above agreement is subject to the following conditions: (1) Assurance from the Brazilian Government that it will put forth utmost effort to encourage production and flow of rubber from all Brazilian markets to Rubber Reserve Company; (2) Export licenses to be restricted to Rubber Reserve or its nominees; (3) All rubber produced to be sold to Rubber Reserve on above price basis, except amount required for domestic consumption; (4) The base price of 39 cents f.o.b. Belém with similar differentials is to be established by Brazilian Government for domestic consumption.

“Rubber Reserve Company will establish representation in such Brazilian markets as may be necessary to expedite purchase and flow of rubber to United States.

“In view of existing conditions affecting rubber supplies please confer appropriate government officials and advise early as possible.”

With reference to (2) above, the Priorities Division of the War Production Board on January 23 last issued an order29 restricting the sale of rubber by dealers to Rubber Reserve Company and conversely [Page 692] restricting purchases of rubber in the United States to Rubber Reserve Company. Accordingly, so far as the United States is concerned, the necessary machinery has already been established.

Hull

[An agreement between the Government of the United States and the Brazilian Government for increasing the production of rubber in Brazil was effected by exchange of notes between the Under Secretary of State (Welles) and the Brazilian Minister of Finance (Souza Costa), signed at Washington, March 3, 1942. For texts of notes, see Department of State Executive Agreement Series No. 371, or 57 Stat. (pt. 2) 1318.]

  1. Not printed.
  2. The Rubber Reserve Company was a purchasing agency of the Federal Loan Agency until February 24, 1942, on which date it was transferred to the Department of Commerce.
  3. 7 Federal Register 511.