Business History Review, Vol. XLIII, No. 2 (Summer, 1969). Copyright © The President and Fellows of Harvard College.

Mr. Berson discovered this remarkable document while researching a political biography of Dr. Oswaldo Aranha as a Fulbright-Hays Fellow during 1967–1968.

¹ “Correspondência: Diversos,” Oswaldo Aranha Archive, Rio de Janeiro, Brazil.

² In 1935, the United States' exports to Brazil amounted to 23.3% of the total and Great Britain's to 12.4%. The former country took 39.4% of Brazil's total exports and the latter merely 9.2%. This was an increase of approximately 4% of the amount of Brazilian products entering the United States in 1934, and a decrease of about 3% of the amount entering British ports. Not only did this commercial trend continue, but shortly before the outbreak of World War II American investments in Brazil surpassed the British.

³ German, Japanese and Italian investments in Brazil in 1935 were indeed more extensive than Dr. Bouças' report indicates. It may be assumed that the man was cognizant of this. That he chose not to include a more detailed accounting of these nations' operations in Brazil only further substantiates the writer's supposition that he purposefully aimed at encouraging further American economic cooperation with and penetration in Brazil.

⁴ The total British investment in Brazil in 1935 was £262,750,632, of which an average interest of 2.2% was paid on £5,912,818 of this total. Four years previously, 1931, the British had £286,137,144 invested in Brazil. This was the largest recorded sum the capitalists of Great Britain had employed in Brazil.

The breakdown for 1935 is given as follows: £158,664,869 in Government bonds, £38,276,308 in various railways, and £65,809,455 invested in miscellaneous enterprises. No interest, it should be noted, was paid on £73,754,312.

The editors of the South American Journal lamented this same year that British investments in railways had never as a group shown good results. Furthermore, the miscellaneous group marks a setback in 1935 — less invested and the return poorer. In addition, the export surplus of Great Britain in 1935 was the lowest it had been since 1921, when it had actually been favorable to Brazil.

⁵ See footnote 2. One may wonder as to why Dr. Bouças chose not to send Ambassador Aranha more recent statistics. These would have been easily found in The South American Journal for 1934 and 1935. Again, this may suggest that Bouças is giving disproportionate strength to Brazil's British trade and thereby encouraging greater American economic ties. The correspondence between these two gentlemen elevates this from mere supposition to a statement of fact. Valentim F. Bouças, Correspondência, 1934–37, Aranha Archives.

⁶ The South American Journal of October 31, 1935, echoing the feelings of British in vestors in Brazil stated, “The British investments in the railways of Brazil have never as a group shown good results.” From an investment of £38,276,308 in railroads, they received merely £712,011 in interest, or 1.9%. No interest at all was paid on £15,175,897.

⁷ The above issue of the Journal also declares that Brazilian Traction, Light and Power was one of the most significant concerns which was suffering setbacks. There is further evidence in the Oswaldo Aranha Archive that this same company was receiving increasingly greater surveillance from the Brazilian government. 1935 marks the beginning of more stringent controls over profits earned by foreign companies leaving the country. “Brazilian Traction, Light & Power, Correspondência, Aranha Archive.

⁸ One observes with some dismay Dr. Bouças' apparent indifference to the unbalanced growth and economic development between the north and south in Brazil. Both Bouças and Aranha were from states in the south of Brazil.