832.6176/8–1545: Telegram

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

2558. For Department and Utz, RDC, from the Ambassador and McLaughlin. Your telegram 1996, August 14. This refers to instruction from RDC to McLaughlin directing him not to go through with offer made on behalf of RDC to extend rubber agreement.

Offer made by RDC to extend agreement for 6 months has already been accepted by Brazilian Government in all respects, and the extension is thus completed. Under circumstances Department’s instruction cannot be carried out.

We will canvass situation with Brazilian Government with view to handling extension as terminal arrangement, but Brazilian Government’s action has been taken on basis of extended agreement and they can of course hold us to this. [Berle and McLaughlin.]