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Germany buys Brazilian cotton, coffee, frozen meats and other goods by bartering German manufactured goods for them. The U. S. has met the challenge by cutting tariffs on Brazil nuts, castor beans and manganese at the same time that Brazil lowered her duties on U. S. automobiles, machines, canned fruits, cereals. The U. S. began the Brazilian battle in earnest in 1937, when President Roosevelt and Secretary of the Treasury Morgenthau agreed to "sell" to Brazil some $60,000,000 worth of sterilized gold from the U. S. stabilization fund. It was the same sort of transaction which occurs frequently between the U. S., Great Britain and France, which have agreed to keep their currencies mutually in balance. The Brazilian transaction in effect pegged the milreis to the dollar. This spring the U. S. followed up with a short-term credit to Brazil of $20,-000,000 and a further loan of $50,000,000 made through the Export-Import Bank. Many were the predictions that Germany, faced with such solid competition, would have to retire from the race. Italian trade with Brazil is small, but what hurts Germany also can be expected indirectly to hurt the Italian partner of the Axis.
Coffee. Whatever her reasons for going to Brazil, the Countess could scarcely have chosen a worse time. Last week Italy was faced with a coffee shortage and Fascist Party Secretary General Achille Starace ordered all able-bodied Fascisti either to stop drinking coffee or to "reduce its consumption to the minimum." He recommended Italy's own "energetic autarchic drinks" (i.e., wine or herb beverages). Said Il Piccolo, Rome newsorgan: "It is not a sacrifice to return to the customs of our ancestors. Did the Romans drink coffee? No! Yet without the excitement of the Arabian drink they possessed such nervous energy that they created the Mediterranean civilization."
Signor Starace's excuse for the coffee ban was not the generally accepted reason that Italy was short of money, but rather to "spite those countries that instead of exchanging coffee for our goods would like our gold." This was taken to apply to Brazil, with whom Italy has no barter agreement. At any rate, the ban did not set well with Brazilians. In Italy wags suggested that perhaps Countess Ciano had set off for Brazil in search of a cup of coffee.
Yankees Wanted. That the U. S. is in better odor in Brazil than the Axis' powers was also suggested by Dr. Adhemar de Barros, Federal chief of Sao Paulo State, who in discussing Brazil's need for agricultural immigrants said: "I would like to bring some Yankee farmers down here." Later, in Washington, the Brazilian Embassy outlined a tentative ten-year-plan for the migration of 700,000 U. S. farm families to Government-owned or subsidized coffee plantations and wheat farms in Brazil.