811.516 Export–Import Bank/811
The American Economic Counselor of Embassy in Brazil (Donnelly) to the President of the Export-Import Bank (Pierson)95
Dear Warren: I refer to your letter of August 9,96 transmitting a draft of an agreement outlining the position of the Export-Import Bank in connection with the proposed financing of suitable persons desiring to acquire Axis-owned or controlled properties in Brazil.
[Page 764]I left copies of the proposal with the Minister of Finance and the Director of Exchange of the Bank of Brazil. The Minister of Finance later approved the plan in principle, and authorized the Director of Exchange to carry on conversations with the Embassy with regard to it. I have just received a letter from Dr. Francisco Alves dos Santos Filho, Director of Exchange, requesting me to transmit to you the attached letter,97 in which the Bank of Brazil states that “we are in complete agreement with the terms of said draft, which we consider a perfect expression of the understandings we have had on the subject”. The Minister of Finance and the Director of Exchange have informed me that they desire to put the plan into operation without delay.
As requested in your letter, I have asked Dr. Carl Kincaid and Dr. Richard P.Momsen98 to examine the draft and to give us the benefit of any suggestions they may have in reference thereto. I attach copies of letters received by the Embassy from them.97 The Director of Exchange has not read the letters. Should you desire to revise the draft of the agreement in acordance with some of the suggestions made by Drs. Kincaid and Momsen, let me know and I shall be pleased to take up these points at once with the Director of Exchange. Incidentally, neither Dr. Kincaid nor Dr. Momsen has even suggested compensation for their services, and I am sure that they have not even considered it because they regard this work as a definite contribution to the war effort to which they have been giving their time unstintingly.
Ed Miller, Fred Wagner99 and I have studied the plan and have concluded that it is an excellent presentation of the case. We suggest, however, that you include a provision exempting the Export-Import Bank from any responsibility in connection with the taxes involved in transferring dollar funds to the United States.
The program for the nationalization of Axis-owned properties in Brazil is at last under way, and we are hopeful that real progress will be made now that the responsibilities for this work have been assigned to the Bank of Brazil. The Bank has set up a separate organization to administer the program and although they are inadequately staffed, the Director of Exchange assures me that additional competent personnel will be assigned to the organization without further delay. The Minister of Finance, who is directly responsible to the President of the Republic for the administration of the program, is taking an active interest in the work, and has recently succeeded in obtaining the President’s approval of legislation intended [Page 765] to eliminate delays and red tape which handicapped the former Economic Defense Commission. The Government has already decreed the nationalization of Axis interests in Pirelli S. A., a copper factory in São Paulo, and the Director of Exchange assures me that other Axis-owned properties will be nationalized shortly, including the Fabrica Nacional de Tambores.
The Minister of Finance and the Director of Exchange of the Bank of Brazil (the latter reflects the position of the entire directorate of the Bank) are looking forward with pleasure to cooperating with your Bank in this important work, and they will await with interest advice from you as to when the plan will be put into operation.
With kind personal regards, I am,
Sincerely yours,