The World Depression Era: Brazil

The World Depression Era: Brazil

Government Responses

Effects of the Depression in Brazil

Brazilian life during the Depression

Catherine Smith

• Farmers could not pay rural workers
• Hunger -- lived off of farm products; not

enough / didn't last long enough

• Unemployment
• Imports/exports/revenue decreased
• Foreign debt: $900 million -- $1.181 billion
• Conclusion: Brazil's failing coffee industry left millions unemployed, left few products available for profitable imports, & closed many doors to trade in general because the economy was so faulty.

• Getulio Vargas
• Dictator --> democratic president
• Increased nationalism
• Increased trade with USA
• Nazi Germany trade: x2 Brazilian exports '33 -'39
• Regulations
• Authoritarian-like
• Stabilize prices: controls on production
• ISI (Import Substitution Industrialization
• encouraged independence of imports by ^ industry
• by '38: domestic industry - 85% Brazil's products
• Still necessary to import some
• Econ: agriculture -- manufacturing
• Banks
• Cotton: 2% - 18% exports
• Imports decreased 75% - more stable economy, increased trade
• National Steel Company (WWII)
• Aviaton, railroads, & road expansion projects
• Social Security, minimum wage, labor protection

policies

Cure of the Depression in Brazil

www.ilo.org/dyn/media/images/web/e14229.jpg

• Wartime economy of WWII
• stimulated jobs, production, exports

• Vargas' policies
• Brazilian economy away from dependence on coffee industry
• Necessary increase in govt regulations

Getulio Vargas

upload . wikimedia . org/wikipedia/commons/thumb/5/50/Getulio_Vargas_(1930).jpg/245px-Getulio_Vargas_(1930).jpg

Sources

Mamaux, Alexis, David M. Smith, Mark Rogers, Yvonne Berliner, Shannon Leggett, and Matt Borgmann. "Latin American Responses to the Great Depression." History of the Americas 1880-1981. Oxford: Oxford UP, 2015. 165-172. Print.

http://countrystudies.us/brazil/61.htm

Causes of Depression in Brazil

• The Wall Street Crash in the USA (domino

effect)

• economic cause
• After coffee prices fell 7 cents due to countries' inability to trade, national income plummeted, and the Depression resulted.
• 40% decline in overall sales

--> trade decreased

govt sold gold reserves to help issue, but depleted by 1930. Left econ. and govt. ruined (political cause)

Social Impact of the Depression

Causes of Depression in Brazil

• Working class: largest
• Ministry of Labors -- labor policies
• Gave unions a voice
• Improved working conditions
• Fair wages = increased consumption

--> Economic boost

• Decline of coffee industry (export-led econ.

policy)

• economic cause
• When the coffee industry began to decline due to worldwide overproduction, Brazil's economy was severely hurt, as it relied heavily on coffee exporting. This set the stage for the Depression.
• Prior 1929

--> 22 cents / lb

--> main export

• world production increase in coffee

--> 15 cents / lb