July 18, 1952
MEMORANDUM FOR S/S
Eric Johnston, during a call on the Secretary today, raised the question of exchange restrictions which the Government of Brazil is imposing, which prevent payment in dollars for material exported from this country to Brazil. He said that action has particularly affected the operation of at least two large American rubber companies. The Firestone people have brought this to Mr. Johnston's attention with the request that he find out the facts in the case and urge any appropriate United States agencies to exert pressure on the Brazilian to remedy the situation.
The Secretary informed Johnston that the Department was aware of the problem and that a cable had gone to Rio the previous evening asking for an explanation of the situation and inquiring as to the actual effect of the exchange decree on the operations of American companies. In addition, Assistant Secretaries Thorp and Miller had conferred on the matter and were going to speak to the Brazilian Ambassador in the coming week. The Secretary said that when we had additional information on this subject he would be glad to pass it along to Mr. Johnston.
(Concurrent with the conclusion of Mr. Johnston's conversation with the Secretary, Assistant Secretary Miller furnished us with a copy of Rio de Janeiro's cable no. 102 of July 18, explaining the nature of the exchange decree and stating that no complaints had been received by the Embassy from the rubber companies.)
Will you please ascertain whether there is any additional information which can be made available for the Secretary. I have not shown him the reference telegram and believe that this subject can best be handled by preparing a brief memorandum.
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