File No. No. 763.72113/767

Memorandum Presented November 2, 1918, by the Representatives of Great Britain, France, Italy, and the United States to the Brazilian Chargé ( De Ipanema Moreira )

The Governments of Great Britain, France, Italy and the United States fear that the reply of the Brazilian Government, presented by the Brazilian Embassy to the Department of State on October 31, 1918, is based on an entire misconception of the letter and spirit of the memorandum submitted on October 23, 1918, to the Brazilian Ambassador [Chargé] at Washington for transmission to his Government.

In that memorandum there was no suggestion that the Brazilian Government should confiscate but there was a recommendation that steps should be taken by the Brazilian authorities for the liquidation of enemy banks and other concerns, and for their replacement by Brazilian or Brazilian and Allied organizations. This recommendation was submitted in order that it might be possible for the Associated Governments to withdraw their black lists for Brazil, so that their subjects might resume trading transactions [Page 356] with Brazil without fear of infringing the laws of the respective Associated Governments as to enemy trading; and furthermore, that the Associated Governments themselves might proceed to offer financial assistance to Brazil by way of advances or otherwise with the conviction that in so doing they would not be indirectly benefiting important non-liquidated German interests.

In proposing the plan outlined in the memorandum of October 23, the Associated Governments also had in mind the importance of assuring Brazil that her economic life need not suffer by reason of the liquidation of the enemy owned banks and other enemy owed concerns. For this reason they declared themselves ready to cooperate financially with Brazil, in order that there should be an immediate and adequate substitute for the financial and commercial services of the liquidated institutions and concerns.

The Associated Governments learn for the first time that the Brazilian Government had on June 7 taken steps under decree of November 16, 1917, for the compulsory liquidation of the three German banks and other concerns operating in Brazil, and for their replacement by Brazilian institutions. They would be glad if they might be furnished with the date of the official public announcement of such compulsory liquidation, and with the terms thereof, and they would likewise be pleased to learn whether similar action has been taken in the case of other enemy concerns, such, for example, as the firm of Theodor Wille.