Evening star., 1939-06-18

courtesy visit made him by Americas
new chief of staff, Gen. George Marshall.
Although less spectacular and less
gripping from the popular point of view,
the visit of Gen. Monteiro, as a guest of
the United States Government, is more
important to the country than the visit
of the British royal couple.
Gen. Monteiro will spend three weeks
here and will visit the American Army
posts and establishments. 1t is hoped
that this visit will heal at least some of
the wounds inflicted on Brazil during
the stay in the United States of Oswaldo
Aranha, Brazils foreign minister.
OF all the South American republics.
Brazil is today probably the staunchest
friend of America and the an-American
idea. The Vargas government has re-
Gently made certain definite sacrifices in
its dealings with the totalitarian states
in order to satisfy the Washington ad-
ministration.
Last April the foreign minister came
to the United States at the special invi-
tation of the State Department to con-
soldate the existing ties between the
two countries. In the invitation extended
to Brazils No. 2 man there was no hint
or indication that he would be required
to take up the question of Brazil's de-
faulted private debts. Aranha arrived
without technical staff
Discussed Debt Refundins.
But soon after he reached this country
he had a conversation with Francis
White, former Assistant Secretary of
State, and now the head of the Bond
holders Protective Association Brazil
owes the U. S. A. something like $780,
100000. Because the State Department
showed keen interest in the settlement
OF the defaulted bonds, Aranha had long
discussions with the leaders of the bond
holders association, and, although his
was supposed to be a goodwill visit. he
agreed to discuss the possible refunding
OF the debt. This he considered necessary
since he intended to obtain certain finan-
cial and economic advantages in the
United States.
After several weeks of more or less
pleasant conversations with the State
Department and President Roosevelt,
Aranha returned to Brazil with the fol-
lowing results:
l. He had obtained a $4,000 900 loan
for the purpose of clearing Brazil's
blocked exchange and thus paying Amer
ican firms which had sold their products
in that republic and could not obtain
the money because of the laws of Brazil.
2. He had obtained the Presidents
promise of loan of $4,000 900 gold to
help the national bank of Brazil. This
loan must be approved by Congress and
for the time being nothing has been
done about it.
3. He had obtained credits for the
purchase in the United States of elec-
trlcal, railroad and other kinds of equip
ment necessary for the development OF
Brazil.
Bitterness in Brazil.
Aranha bitterly remarked during his
stay here that while the rate of interest
on important amounts in the United
States does not exceed per cent, Brazil
was required to pay 4, and only after
long discussion was it reduced to 3.6
per cent Furthermore, under the pres
sure of the Bondholders' Association.
Minister Aranha agreed to start refund
ing the $300y0O0,0OO defaulted indebted
ness. beginning June 80 of this year.
With these results he went back to
Brazil. AS might have been expected
with the exception of President Getulio
Vargas, the whole cabinet fairly roasted
the most energetic advocate of Brazilian
American friendship. Aranha seemed to
have forgotten the arrangement between
Brazil and other creditors like Great
Britain and France. This agreement pro-
vlded that whenever Brazil begins to
refund its debt to the United States it
will satisfy its other creditors in the
same manner. The amount owed to
Great Britain is approximately $500 ,OO0,-
900 and to other countries smaller
amounts. In any case, the ARRANGEMENTS
Aranha concluded during the goodwill
visit to Washington meant that Brazil
would have to begin refunding this year
an Indebtedness amounting to a little
over $1,000, 100000, and the income of
Brazil has not increased materially since
the time 1t was compelled to renege on
its Indebtedness.
The man in the street in Brazil felt
bitterly, too. To him there is no differ
ence between actual war debts and debts
his country has contracted in the United
states. He could not understand why
this country should insist on the paw
ment of the defaulted bonds when it
took so little notice of the defaults of
much richer countries such as Great
Britain and France, which he knew owed
the United States much larger amounts
Pro-Fascists Strengthened.
All In all, the transactions concluded
by Aranha caused unhappiness in all
quarters The foreign minister's COL
leagues complained that the credits he
obtained in the United States could
benefit only the American exporters and
American business; that the rates of in
terest he agreed to pay were not in
keeping with the monetary market, and
that he obligated Brazil to begin the
refunding of $1,000, 900 900 which Brazil
Is IN no position to do these days.
As was natural, the pro- -Nazi and pro-
Fascist elements, which are still powerful
in the South American republic did not
neglect the opportunity to strengthen
their cause. They Immediately began to
point out that the great friend" in the
north was thinking only in terms of