811.20 Defense (M) Brazil/780: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received 6:30 p.m.]
1615. For Finletter, Clayton, Newhall, Klossner. Mr. Bouças50 informs us that he understood the 5-million-dollar fund referred to in clause 4 of the rubber agreement of March 351 and in numbered paragraph 1 of Souza Costa’s note to Mr. Welles dated March 352 was to be in addition to the quantity premium payable on rubber in excess of 5,000 and 10,000 tons annually. Mr. Bouças stated that [Page 703] his understanding reached in Washington was that the premiums would be paid over to the Instituto Agronomico do Norte or the new rubber Institute and not used as a credit against the 5–milliondollar fund.
We had understood that the premiums as due would be credited against any part of the 5-million-dollar fund which had been used in Brazil for the purpose of increasing rubber production until that part of the 5-million-dollar fund so used had been covered after which any such premium would then be paid outright to the appropriate Brazilian governmental agency.
In order to avoid serious misunderstanding at this end it is urgently requested that you telegraph your interpretation as soon as possible.