1. Why was Brazil affected by the Great Depression?

Coffee being embarked in the Port of Santos,  São Paulo, 1880

Starter

In groups research the political, economic and social structures in Brazil from 1890 to 1920

1. What was the nature of the federal government? What was its relationship with the provinces?
2. Which provinces were most powerful?
3. Which social groups had the most power? Why was this a problem?
4. What tensions existed in Brazil?
5. What was the role of the military?
6. What evidence is there of rebellions against the government?
7. How had the First World War impacted on Brazil's trade?
8. What was the overall state of industrialization in the country?

Following your research identify as a class the strengths and weaknesses that existed in Brazil's economic. social and political structures.

Task One

ATL: Thinking skills

The results of the depression on Brazil by 1931 was severe:

• As most of the population was dependent on agriculture, the economic slump forced many out of work and ruined many of the large planters some of whom had taken out large loans before the crash in the expectation of guaranteed profits
• Unemployment in the cities grew
• Fall in income in all sections of society meant a fall in demand for goods which further affected industry
• International trade was further affected when the Brazilian government suspended payments on debt in September 1931 and imposed restrictions to prevent investors selling off currency
• Between 1929 and 1931, Brazil’s GDP fell by 4%. In the ensuing two years it fell another 5%.

2. What were the political effects of the Depression?

'Beginning in 1930, an exchange of elites took place. The traditional oligarchies fell from power. Their place was taken by military men, technocrats, young politicians, and, a little later, by industrialists.' Boris Fausto

At the time of the Wall Street Crash, the President of Brazil was Washington Luís. He had previously been governor of the state of São Paulo, the most developed state of Brazil and the one which dominated the politics of Brazil in the 1920s. He attempted to deal with the Depression by using policies similar to those of Hoover in the US i.e. maintaining a balanced budget and keeping government spending low in the belief that the Depression would run its course and there would eventually be a recovery. He also refused to lower the value of the currency despite the pleas of the coffee growers.

Luís' economic policies brought together a range of opponents to challenge his position and thwart his aim of handing over the Presidency to another politician from São Paulo (as opposed to the state of Minas Gerais, as was the usual practice). These opponents included:

• Leaders of other provinces, primarily the states of Rio Grande do Sul and Minas Gerais. As you will have found out in your research task at the start of this unit, each state of Brazil had considerable powers, even to the extent of being able to raise their own army. These states blamed São Paulo for the impact of the Depression in their own areas
• Army officers, or the tenentes, who wanted to see the modernisation of Brazil. They saw the powerful provinces (supported in their power by corrupt elections), as a hindrance to stronger economic growth and government led modernisation. They were also concerned about growing support for Communism. (note that such concerns predated the Depression)
• Coffee planters who believed the government was not doing enough to help them
• Reformers on the left within the province of São Paulo who believed that the government was not doing enough to relieve poverty and unemployment

The strength of this opposition meant that in October 1930, the army overthrew Julio Prestes, the São Paulan who had won the 1930 election, and installed Getúlio Vargas instead. This was a watershed in Brazilian politics as it ended the monopoly of the paulista coffee oligarchs.

Task One

ATL: Thinking and self-management skills

Task Two

ATL: Research and communication skills

3. What political developments took place under Vargas?

Paulista propaganda poster during the 1932 revolution

From 1930, Brazil was dominated by Getúlio Vargas who was President from 1930 to 1945 and then from 1951 to 1954. As explained above, his takeover was a watershed in Brazilian politics; Vargas aimed to modernise and industrialise Brazil and to move power away from the traditional elites such as the coffee planters to the more modernising groups such as the urban middle class.

Starter

Watch the following video

What were the key characteristics of President Vargas' rule?

Vargas was made 'provisional' President in 1930.

In 1932, São Paulo rose up against its loss of rights and influence and against the provisional rule of Vargas. It was known as the Constitutionalist Revolution as it demanded a constitution which Vargas would have to abide by.

The revolt was crushed by the military but some of its demands were met. A Constitutional Assembly was elected via new voting rules which gave the vote to all men over 18 and working women, introduced secret ballot and set up a body to supervise elections and prevent fraud and corruption. This new assembly drew up the Constitution which came into being July 16, 1934.

This constitution was significant because it was the first time Brazil had had an a constitution written by elected deputies and because it introduced fundamental changes in political, social and economic areas of Brazil, extending the role and responsibilities of government.

It introduced the following:

• an independent Supreme Court
• An electoral court to supervise elections which was under the control of the Supreme Court
• Acknowledgement of social rights alongside political and civil ones: the national minimum wage, the eight-hour workday, weekly day of rest, paid vacations and fines for unfair dismissal
• A labour court to control working conditions and rights and duties of both employers and employees
• Listed the four basic freedoms of speech, religion, movement and assembly alongside the basic rights of life, freedom and property

While maintaining the federal system it strengthened the power of the Presidency and clearly aimed to reduce the power of the traditional elites. The President was elected by both houses of Congress for a period of 4 years and could not then stand again. the Chamber of Deputies was made up of representatives of 50 corporations following Mussolini's Fascist economic model, alongside 250 deputies representing the wider population.

Task One

ATL: Research skills

Task Two

ATL: Thinking skills

After 1934, Vargas faced protest from extremists on both the Left and the Right. Having suppressed the rebellions Vargas closed Brazil's Congress and declared dictatorial rule. This was known as the Estado Novo or 'New State'. It was a repressive state with a secret police and concentration camps. Opposition parties were abolished and rigid censorship imposed. Nationalism was emphasised as a way of uniting the country and binding people to the state. It has thus been compared to Fascist regimes in Europe which were developing at the same time.

Task Three

ATL: Research skills

Task Three

ATL: Self-management skills

4. What were the economic and social policies of Vargas?

Starter: What is the message of this poster?

The caption reads:

Children! Learning at home and at the schools the cult of the Fatherland, you shall bring to practical life all probabilities of success. Only love builds and, loving Brazil, you shall certainly conduct it to the highest destinies amongst Nations, fulfilling the wishes of aggrandizement nestled in every Brazilian heart.”

Key policies for Brazil were those of industrialisation and import substitution or ISI. This was a major feature of several Latin American states; the aim was to restrict foreign imports by implementing high tariffs in order to develop internal production. Vargas said he wanted to: "perfect our manufacturers to the point where it will become unpatriotic to feed or clothe ourselves with imported goods." Ambitious social policies accompanied economic reform.  The state now took responsibility for improving labour relations and conditions, for family life and for the activities of the young.

Vargas carried out the following economic and social policies:

• He set up the National Coffee Council in 1931 which later became the National Department of Coffee. It aimed to control the marketing and sale of coffee and one of its first directives was to cut back on the planting of coffee trees and also to buy up surplus coffee and destroy it
• He encouraged the agricultural sector to diversify e.g. with livestock raising and cotton production
• He promoted industrial production as a way of reinvigorating the country; the government offered incentives to investment by guaranteeing private ownership of industries. It also promoted steel production and established the Volta Redonda steelworks with a mixture of government money and US support
• Vargas protected industry by imposing import controls and duties to protect new industries (as explained above)
• Long-term loans with low interest rates were also given to new industries
• Foreign investment was kept to a minimum; in 1937 a law banned foreign companies from exploiting minerals; US oil refineries were placed under Brazilian control in 1938; in 1939 only banks with Brazilian shareholders could operate
• 1n 1940  a Five Year Plan was introduced; this focused on the infrastructure and the development of hydroelectric power as well as oil and steel.
• Syndicates were established for each part of the economy to represent both workers and employers. In May 1931, a decree organised workers in state controlled unions
• He crushed a series of peasant revolts known as the "cangaço".
• Strikes were made illegal after 1937; state labour courts settled disputes
• Workers gained minimum wages, pension schemes, a maximum 48 hour working week and health and safety regulations (thought those in rural areas or small industries did no always benefit from these regulations)
• Schools and universities were built to increase education standards and technical skills. There were campaigns against illiteracy. (though again the poor and rural areas benefited least from this - there were only 12 free schools in Brazil by 1940)
• The Brazilian Youth Corps was established in 1940 to help educate the youth in nationalism as well as how to live a healthy life

Task One

ATL: Thinking and communication skills

Task Two

ATL: Thinking skills

5. How successful were Vargas' economic and social policies?

The Volta Redonda steelworks, built between 1941 and 1946; it was a symbol of the Vargas era producing 300 000 tons of steel a year from 1946.

Task One

ATL: Thinking skills