Great Depression in Latin America: Brazil

The Great Depression in Latin America - Brazil

Brazil became a republic in 1889: its government was a federation of autonomous states led by the "Old Republic" (1920s was final decade of the "Old Republic" which ended as it began, by a military coup) that was dominated by oligarchies of coffee and milk. The country had a constitution democracy, but illiterates and women, who made up most of the population, couldn't vote.

• Getulio Vargas was born in Brazil in 1882 and died in 1954.
• He was the dictator/president of Brazil for 18 years, from 1930 to 1945 and from 1951 to 1954.
• Vargas was born in a family of cattle ranchers and acquired a doctorate in law.

Getulio Vargas was a nationalist who favored industrialism, social welfare, centralization, and populism. Although he has been criticized for ruling as a dictator and largely without a congress, Vargas helped Brazil remain stable during the Depression and personally resisted attempts by Brazilian communists and fascists to overthrow the government. His aims were to modernize and industrialize Brazil and above all, end it's over-reliance on coffee.

Objectives:

1920's Political Problems

Political Role of the Military

Brazil in the 1920s

Final decade of the 'Old Republic', which ended as it begun, by a military coup.

• Technically a democracy with a central government and 20 states. However, elections were rigged with the office of the president alternated between dominant southeastern states of Sao Paulo and Minas Gerais (process known as cafe com leite - or coffee with milk, because of their respective main agricultural products.
• Only 5% of adults met literacy qualifications to vote, overall less than 3% voted.
• Life was poor, average life expectancy was only 28 (1928).
• Later years of Old Republic saw to major developments (both wanting modernization):
• Growing urban middle & working classes demanded a greater say.
• Military had a growing involvement in politics

Until the 1920s, the military was content to allow civilian politicans to rule, however, after WWI, this changed for the following reasons:

• President Epitacio Pessoa vetoaed a bill to increase military spending and put civilians in charge of army/navy

• Series of economic problems (coffee, etc)

• Fallout between two dominant provinces when Artur Silva Bernardes (from Minas Gerais area) was selected for president. Sao Paulo felt it was their turn, so they formed the Republican Reaction movement, with other states (Rio de Janeiro and Rio Grande do Sul) joining.

• General Fonseca, a charismatic general, headed up the influential Military Club of Rio de Janeiro and was arrested over a dispute .

• Junior officers (called tenentes) took direct action in a series of rebellions without their senior officers. Sought modernization and reform.

• Brazil in the 1920s
• Economic problems
• Political problems
• Military coup of 1930
• Brazil in the 1930s
• Head of Provisional Government
• Constitutional Government
• Estado Novo ('New State')
• Economic policies
• Social developments

Economic problems:

• Dominated by coffee production (govt introducted valorization where if coffee prices fell below a set level, the govt would buy coffee beans and store them until price rose.
• Mass production of rubber declined
• Sugar production declined
• Wholly dependent on trade with developed countries and had to import most of its manufactured goods and 80% of grain.
• Shift away from European trade towards US trade. The US owned 35% of Brazilian national debt
• Signification immigration (500K, most from south Europe)

Getulio Vargas

Military coup of 1930

Discontent

Improved Conditions

Army rebellions

• Govt. downplayed significance of rebellions.

• Many felt that going into 1890, Brazil was on the verge of becoming a major power.

• Many disliked the power of the coffee magnates and their political connection/corruption.

• Communist Party was founded in 1922 with policies of egalitarian revolution (revolution to make people more equal).

• Catholic Church started to concern itself with the horrible social conditions of the working class and below.

At the end of his term, Luis, wanted to hand over power to the governor of Sao Paulo, Julio Prestes. This annoyed other groups because they felt like it was their turn to have a president from their state (such as Minas Gerais). This crisis was made worse by the onset of the Great Depression:

• Prices of coffee fell from 22.5 to 8 cents a pound (warehouses full of unsold coffee - 25M sacks);
• Trade w/ Britain fell 37%;
• By 1930, gold reserves were exhausted;

Opponents of Prestes, formed the Liberal Alliance and nominated Getulio Vargas. Prestes won re-election (unsurprisingly) as no official candidate ever lost a presidential election.

However, Vargas VP was assassinated in an ice cream parlor in the city of Recife. Opposition accused outgoing President Luis of organizing the crime, which led to a coup, with Vargas being appointed president.

1926 - Washington Luis won presidency with 98% of votes cast. Economic conditions had started to improve. He:

• Balanced the budget
• Controlled public finances
• Setup a Stabilization Office (paper currency backed by gold)

However, still there were problems with the amount of national debt which stood at $900M when he took office, by 1930 it rose to $1.18B

• 1922: Copacabana beach fort - order was quickly restored.

• 1924: Sao Paulo - officers made common ground w/ members of the working class. Held the city for 22 days before order was restored. Rebellion had spread to other areas.

• The "Prestes Column" - rebels from Rio Grande do Sul under Captain Luis Carlos Prestes joined forces with those escaping Sao Paulo and marched over 3 years through the rough jungle terrain to sanctuary in Bolivia.

Brazil in the 1930s

Head of Provisional Govt (1930-34)

Vargas became head of the government, following the military coup. His first government was termed "provisional" while a new constitution was being drawn up.

In February 1932, a new electoral code was passed which:

• Voting rights for all literate adults over 18 and to working women
• Introduced the secret ballot
• Created the Election Justice to organize and supervise elections (to help eliminate fraud)

Head of Provisional Govt cont.

KEY TERMS

State interventors: officials appointed by Vargas to run Brazilian states after state govts were suspended

Paulistas: People from he region of Sao Paulo

Vargas responses to political extremism

The RIGHT

Constitutional Government (1934-37)

Vargas banned all political parties, cancelled upcoming election, dismissed Congress and assumed all power for himself. - Here's why:

In Sept. 1937, he announced the discovery of the "Cohen Plan", which is now known to be a forgery, that was a blueprint for a widespread Communist takeover.

Details of plans included massacre, rape, pillage, and burning of churches.

This was effectively a coup by the president.

Integralist Party (AIB): setup by Plinio Salgado, a writer, in October 1932. Openly copied European fascists (specifically Italy's Mussolini & Salazar's Portugal).

Main aim: enhance national consciousness about everything.

Their sigma symbol (Greek letter ∑) and green-shirted uniform, emphasized ideas such as hierarchy and obedience with slogans like - "God, Fatherland, and Family". Many recruits from urban middle classes.

They attached Jews, Freemasons, and Communists.

Paulista War 1932

NLA cont.

Paulista War

November 1935 spurred several military uprisings, which gave the govt the excuse to have known Communists & their sympathizers arrested.

Two institutions were created:

• Bureaux for Repression, included the National Commission for Stopping Communism, who were tasked to investigate any civil servants & others participating in activities against the state
• National Security Tribunal was setup to try these people, who were pretty much always found guilty.

Economic Policies

The Five-Year Plan

Relationship of Estado Novo to fascism

Estado Novo 1937-1945

Focus on railway expansion & development of hydroelectric power.

• National Council for Hydraulic and Electric Energy - harnessed power of the rivers
• Oil - National Petroleum Company (CNP)- Vargas initiated a search for oil as an alternative source of power, because foreign companies controlled most of Brazil's electrical supply
• National Steel Company - controlled steel production. Vargas accepted foreign investment and received funding from US Import and Export Bank and Britain.

• National Coffee Council: control production & marketing of coffee (changed it's name to National Dept of Coffee later) (cutback planting coffee trees & burned coffee - 60M bags);

• Diversification - encouraged agriculture sector to diversity with livestock and cotton.

• Industrial developments - wanted to lessen reliance on other countries. Vargas used resources of the state to help with industrial growth. Industrial sector doubled from 21% in 1921 to 43% by 1930

• Components of fascism in place: corporations, repression, and emphasis of nation over individual.

• Vargas never created a political movement and believed political parties were divisive.

• He is viewed as a dictator who sought modernization above all, and then nationalism.

• Vargas - gave "fireside chats" on the radio, understanding the power of the media

Vargas's support base

During this period, an increase in political extremism from the left and right.

LEFT:

• Communist Party: gained more support as Depression continued
• National Liberation Alliance (NLA): 1935, emerged from within the Communist Party. Slogan - "Bread, Land, and Liberty". Promoted:
• Nationalization of foreign enterprises
• Redistribution of land among rural working classes
• Cancellation of foreign debts
• Full democracy

However, no ideas related to workers rights

• Leader - radical tenente Luis Carlos Prestes
• They were banned under the National Security Act of March 1935

Portuguese for "New State". Vargas set up a special police force which used torture or other means of repression, introduced strict censorship, abolished personal freedoms, and introduced strict press censorship (fascist-style dictatorship).

Reactions:

• Those pro-democracy were outraged
• Working classes appeared indifferent to whoever was in power
• Most nationalists supported Vargas
• Most importantly - he had support of military
• He got rid of political unreliable senior officers and promoted new ones
• Increased military salaries and doubled the military in number
• However, the Integralists rebelled and attacked presidential palace with Vargas inside, who escaped through underground tunnels and the revolt collapsed.

Political Problems

• Military

• Middle Class

• Growing urban working class

• He referred to himself as "Father of the People" and encouraged state controlled trade unions which helped win real concessions for workers such as the introduction of social security in the Labour Code of 1943.

Vargas sent General Isidoro Dias Lopez (leader of tenentes' 1924 revolt) to command the military in Sao Paulo, with former tenente, Joao Alberto as interventor. Alberto decreed a 5% wage increase for workers and began to distribute land to army veterans. Paulistas accused him of communism. Vargas listened to their complaints and replaced him, which was seen as a sign of weakness, so they revolted against Vargas.

• "Gold to help Sao Paulo" movement saw thousands donate valuables to the war treasury.
• No other state joined in, leaving Sao Paulo isolated
• Rebellion collapsed after a 3 month seige and Vargas chose leniency and agreed to install a constitution.
• Vargas realized he had to appease the powerful elites.

Obstacles to industrialization

SOCIAL DEVELOPMENTS

How Vargas appeased coffee tycoons and elites from Sao Paulo

• Plants depended on machinery from abroad

• Transport network mostly undeveloped

• Uneven industrial development across country, wealthy states was where most took place

• Economy was still dominated by agriculture, using slash and burn (cutting down and burning forests to create land for agriculture)

• Internal migration - consider migration from rural areas to towns and cities. Vargas marketed himself as "Father of the Poor".

• Organized labor - Fearing independent trade unions, but needing support of working classes, Vargas setup government-sponsored unions. Bureaux of Reconciliation & Arbitration were setup. Workers benefits included pension plans, minimum wages, 48 hour work week etc. Exceptions for benefits: rural peasantry & small-scale industry employees

• Education - Vargas attached great importance to this and his first Minister of Education reformed the system. Primary education was compulsory and new universities were opened. However, $ was tight.

• Middle Classes - Created the Administrative Dept of the Civil Service (DASP), which introduced merit-based exams.

• Passed the Economic Readjustment Act, which reduced the debts of those planters badly affected by the Depression. (personal level)

• Appointed a Paulista civilian, Armando de Sales Oliveira, as the new interventor. (state level)

Many old elites, particularly in Sao Paulo, opposed Vargas. In 1930, Vargas dissolved the Congress and State assemblies. An "Interventor's Code" was drawn up which the autonomy of the states was limited and subordinated to central authority.

In an attempt to ward off any rebellions, states couldn't spend more than 10% of budget on militias or police.

Clube 3 de Outubro (3 October Club) - Discontent tenentes formed this in 1931. Advocated ideas such as:

• nationalization and modernization
• stronger presidency
• legislature indirectly elected by delegates appointed by others
• promoting national unity
• land reform
• equal distribution of income
• importance of group over individual

(Similar ideas to fascist parties in Europe)

Vargas's Legacy

The Fall of Vargas - 1945

Interventor: officials appointed by Vargas to run Brazilian states after the state govts were suspended.

• Changed Brazil from a rural nation dominated by coffee to an urban, industrial one.

• Weakened power of old elites by introducing secret ballot, voting for working women, and merit-based civil service appointments.

• New industries catered to domestic demands, reducing dependence on imports. Agriculture was modernized as well, however growth was still uneven.

• Substantial developments in oil, steel, and textiles. Industrial production was 2x agriculture production by 1938

• Gave Brazilians pride in their growth as a country

Vargas started working with Nazi Germany in regards to trade, where Germany became the 2nd largest market for coffee. It was assumed Vargas was going to join the Axis (Japan, Italy, Germany) powers in the war. Tensions arose because Germany's govt wanted Brazil immigrants from German origin to maintain their German identity and embrace Nazi ideas, whereas Vargas wanted them to integrate as Brazilians.

• 1942 - Brazil declares war on Germany because of the sinking of Brazilian cargo vessels en route to Allied ports. They sent 25K troops and allowed the US to establish air and naval bases in the north.
• Brazilians asked why were they fighting for democracy abroad, when they were a dictatorship
• Military overthrew him in a coup.

Vargas found these to be useful allies.