304. Memorandum of a Conversation, Department of State, Washington, February 3, 19551
SUBJECT
- Relations between Brazil and the United States
PARTICIPANTS
- Ambassador João Carlos Muniz
- ARA—Assistant Secretary Henry F. Holland
- OSA—Mr. Atwood
- OSA—Mr. Monsen
Ambassador Muniz called at the Department this afternoon to show Mr. Holland a copy of a letter from the Brazilian Foreign Minister, Raul Fernandes, in which the Minister expressed with some bitterness his opinion that the U.S. had adopted a narrow, “banker’s approach” in its relations with Brazil.2 Mr. Holland said that while he could understand the reasons for such apprehensions, Minister Fernandes was mistaken. The present situation in Brazil was a source of deep concern to him, Mr. Holland stated, and he and other officials in the Department had spent a great deal of time considering how best the U.S. could assist Brazil. Minister Fernandes and Finance Minister Gudin were working with great courage and ability to meet a most difficult situation and are held in the highest regard by this Government, Mr. Holland said. He regretted very much the view of the Foreign Minister that U.S. aid to Brazil is controlled only by economic considerations, and he said he hoped Ambassador Muniz could relieve Mr. Fernandes of this erroneous opinion.
Mr. Holland reviewed Brazil’s economic problems, particularly the budget deficit, and the petroleum and coffee problems, and noted that these were all matters which only Brazil could solve, and that upon their solution depended any permanent economic progress. Additional loans from the U.S. will not, by themselves, solve Brazil’s problems, and he pointed out that this method had been tried repeatedly over the past three years with no success. Mr. Holland said he was sure that all U.S. officials concerned with Brazilian affairs were anxious to help, but they wanted some assurance that additional U.S. aid would not merely postpone the crisis and defer [Page 641] the time when Brazil would act on those problems which it alone can solve.
The easiest course for the U.S. to follow would be to lend the Brazilian Government some money and let our assistance stop at that, Mr. Holland said. But because of our great friendship with Brazil and its importance in the hemisphere we would prefer to sit down with officials of the Brazilian Government to discuss its problems and see if, as good partners, we cannot assist Brazil in achieving a stable, healthy, and productive economy. It was for this purpose that the U.S. had requested Minister Gudin to name a representative to meet with officials of the Eximbank and the Treasury Department, Mr. Holland explained. Those talks have been helpful, he said, but the point has now been reached when it would be more productive to move the discussions to Rio where high officials of this Government could talk directly with Ministers Gudin and Fernandes. To this end, Mr. Holland asked Ambassador Muniz to talk to Mr. Paranagua and, in such a way as would not offend the latter nor imply any lack of respect for him on our part, suggest that it would be profitable to send a group from the U.S. Government to Brazil to continue the discussions. The Ambassador promised to do this.
Ambassador Muniz expressed the fear that Minister Gudin would think this was “just one more mission sent down to look at his books,” and he stated that Gudin felt he had given us all the information available, and that in the past such missions had merely been used as a method of procrastination.
Mr. Atwood replied that this would not be the case, since one of the primary purposes of sending a group down would be to dispel the misconception that the U.S. was motivated mainly by economic considerations and to reassure the Foreign Minister that the traditional U.S.-Brazilian relations are of the utmost importance to us and that our government has every desire to maintain these close ties. Mr. Holland agreed and added that this group would go down to Rio to discuss Brazil’s problems and needs and reach a conclusion.
As he was leaving, the Ambassador inquired about Mr. Holland’s forthcoming trip through Central America with the Vice President. Muniz was told that it would be purely a good will trip, and he expressed the wish that it would be a pleasant one.3
- Source: Department of State, Central Files, 611.32/2–355. Confidential. Drafted by Monsen.↩
- On January 20, Ambassador Muniz delivered this letter to Nelson A. Rockefeller, Special Assistant to the President. In a memorandum to Dulles, dated January 31, Rockefeller briefly summarized his meeting with Muniz and the contents of Fernandes’ letter. (Ibid., 611.32/1–3155)↩
- See vol. vi, Document 195.↩