Office of the Historian

832.852/59: Telegram

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

Rio de Janeiro, October 21, 1942—7 p.m.
[Received 11:02 p.m.]

4316. For Douglas and Radner, War Shipping Administration,32 from Graham.33 Tanker Itamaraty, Minister of Foreign Affairs and Brazil Maritime Commission now propose:

1.
The Brazilian Government shall charter the tanker Itamaraty to the United States Government “as is, where is” at a nominal rate for the duration of the hostilities on the same basis as 13 ships.
2.
The cost or [of] repairs of the vessel including classification shall be borne by the United States Government.
3.
The vessel shall be fully insured against war and marine risks by the United States Government.
4.
In case the vessel is lost the United States Government shall pay $1,200,000 out of the insurance to the Brazilian Government.
5.
If not lost the vessel shall be delivered in class to the Brazilian Government free of liens and encumbrances 30 days after the end of the hostilities.

With the Ambassador’s approval we had a long conference yesterday with officials of the Ministry of Foreign Affairs. The subject of passenger vessels and joint working out of mutual problems were discussed. Brazilians fear that if more ships, particularly passenger, are turned over to us they may find themselves in grave difficulties in coastwise movement, particularly of troops, laborers and [Page 746] supplies to northern Brazil. We assured them that if they give us the passenger ships some basis could be worked out for meeting whatever current needs of the two countries might arise thereafter. We suggested the prompt establishment of a joint Brazilian-American shipping adjustment group to handle such matters. The idea was well received. We feel that the establishment now of such a group is a necessary requirement to cover the operations of the 23 ships under article III of the agreement of September 3034 and also to take care of the use of our vessels in local coastwise trade when needed by Brazilians and when they would otherwise move in ballast as in the case of the Galveston, as well as to take care of operations of any passenger and other vessels we might hereafter acquire. At present no machinery is set up for operations under article III and we believe we will not get passenger vessels except under agreement to afford their use by Brazil when the need is shown.

The Ministry urged haste in disposition of Itamaraty. We believe whatever we do with respect to this vessel can be effectively used as a lever to acquire possibly passenger and other vessels; therefore, please bear this fact in mind in replying to this telegram. Please telegraph data relative to condition, the cost of repairs and value of Itamaraty.

With reference to the use of our vessels in Brazilian coastwise trade, we believe every effort should be made by us to afford such use when desired by Brazil, which will waive coastwise laws because the needs in this trade, particularly in north Brazil, are interfering with our obtaining more Brazilian tonnage.

We will meet with Aranha Friday afternoon, therefore please telegraph reply to reach us not later than Friday morning. [Graham.]

Caffery
  1. Lewis W. Douglas, Deputy Administrator, and William Radner, General Counsel.↩
  2. Chalmers G. Graham, field representative, War Shipping Administration.↩
  3. Not printed, but see footnote 29, p. 743.↩