Latin America: A Debt Settled

Brazil's recent practice of expropriating U.S. companies was proving both expensive and risky. In February 1962, the state government in Rio Grande do Sul expropriated Companhia Telefônica Nacional, an International Telephone and Telegraph subsidiary. Five months later, the governor of Pernambuco took over a subsidiary of American & Foreign Power Co., Pernambuco Tramways and Power Co. In both cases, the companies received little or no payment, while the companies' legal protests ground their way through Brazil's agonizingly slow courts—years and perhaps decades away from firm settlement. Last week, suddenly, both companies...

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