Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume V

740.00112A European War 1939/27590

Memorandum by the Brazilian Economic Defense Commission to the American Embassy in Brazil⁸¹

[Translation]

943.1 (22) (00)

Rio de Janeiro, February 4, 1943.

Upon receipt of the memorandum from your Embassy, dated December 30, 1942, this Commission carefully examined the bases established by the American Government for treating firms included in the so-called “Black List”, operating in the Brazilian territory.

2. Evidently, the instructions issued in Washington on the matter were drawn up at a time when the Brazilian authorities—after the first period of the transformation of its commercial policy, following the severance of relations and subsequent declaration of war against the Axis powers—had taken emergency measures in connection with such firms. Later the Brazilian Government thought it advisable to consolidate such measures, making them definite, by means of a special decree, which created the Economic Defense Commission, an organ directly under the supervision of the President of the Republic and composed of elements from the high public administration, selected for this important undertaking by the Chief of the Government himself (Decree-Law No. 4807 of October 7, 1942).

3. In this manner the previous picture was completely modified, through the centralization of the governmental action, exercised by the Economic Defense Commission, through its own acts or through its auxiliary organizations (Article 33 of Internal Regulations approved by Decree-Law No. 10912 of November 24 [25], 1942).

4. This Commission, as is well known, is in full operation, and its action is already being felt in the sectors of interest to national safety and economy.

5. Within the program of its activities the law has stipulated the Commission’s right to intervene, through agents recommended by it and appointed by the President of the Republic, in commercial, industrial or other entities, which are then subjected to a regime of supervision, administration, or liquidation, as the case may be, once their operation is contrary to the economic interests of Brazil or to its safety (Articles 4, 11 and 12 of Decree-Law No. 4807).

6. Pursuant to this program of economic control over the enemy, the first delegates in the confidence of the government have already been appointed and have taken office and are working in close connection with this Commission, which gives them instructions and adequately supervises the performance of their duties (See Resolutions No. 13, 16 and 21 of 1943).

7. Other enemy organizations, or those connected with the enemy, are the subject of constant investigation, which will undoubtedly result in the appointment of new delegates.

8. This is the present status of the action of the State with regard to the matter under discussion, which presents quite a different aspect—as should again be recalled—from that which obtained at the time the instructions of Your Excellency’s Government were issued.

9. In reply to the memorandum addressed to it, this Commission wishes to view with a practical sense certain vital points of reciprocal interest to the two friendly nations, which, as such, examine the common problem with a sincere wish to find formulas to satisfy their mutual necessities, without losing sight of the objective in which we concentrate our post-war anxieties: the economic destruction of the enemy.

10. It would evidently be unwise if, by the mere naming of those agents mentioned above, this Commission would immediately request the deletion of the firm under control from the “Black List”. During this first phase what seems to be advisable is for this organ to request commercial facilities for specific transactions, as long as they will be practised under the immediate responsibility of the delegates of the Economic Defense Commission.

11. Such a regime must last up to such time as this Commission is in a position to feel sure that the enemy interests have been definitely removed or in the process of being removed, without the danger of retrocession. Upon this accomplishment, the Economic Defense Commission will submit a formal communication regarding the matter, subsequent to which it expects a suspension of any restrictions on domestic transactions or exports carried out by the firm, which means, finally, the deletion of the firm from the “Black List”.

12. It is the understanding of the Commission that the general restrictions for the import trade may be maintained, and that this trade will be subject, as usual, to the system of previous consultation with Washington.

13. There remains to be studied a question which deserves special attention and which refers to the status of technicians who are Axis subjects. In this respect this Commission believes that they should be maintained, while indispensable or irreplaceable by Brazilians or nationals of friendly nations, it being emphasized, however, that the preservation of such employment will be only on a strictly technical basis and never with participation in the administrative business of the organization to which they may belong.

14. The Economic Defense Commission hopes that the Embassy may fully realize the motives, so highly important to the economic life of the country, which guided the establishment of the points mentioned above, with respect to which it would appreciate knowing the views of the American Government, so that our countries may keep their interests in coordination and harmony, thus further consolidating the policy of intimate understanding and profound cordiality which holds forever the links of friendship between the North American people and the Brazilian nation.

81. Copy transmitted to the Department by the Ambassador in Brazil in bis despatch No. 10425, March 15; received March 26.