The history of the Vargas administrtion from his appointment by the military in 1930 to his suicide in 1954. He was elected president, appointed president by the military, and dictator of Brazil for almost 20 years.
In 1929 the world economy crashed when the United States stock market, a market heavily tied to every other major economic scene in the world, crashed. Ripples were felt all over the world, as exports lost value, world demand fell to next to nothing, and creditors raised interest rates. Nowhere was this felt more acutely than in the developing countries of the world. Brazil was one of these countries. Before 1929, Brazil had been growing at a fantastic rate, mostly due to a favorable market for rubber and coffee. These two products accounted for nearly all of their annual exports. The United States, England and Germany were Brazil's major buyers. However, these countries were some of the hardest hit by the crash. Thus, they were unable to buy Brazilian exports. Thus, demand for Brazilian exports fell. On top of that, in an attempt to save United States banks, the federal government raised the interest rates on the loans made to Brazil. Thus, Brazil had to pay more on their debts, while earning considerably less on their exports.
Washington Luis was the elected president of Brazil in 1929. Despite the fact that Brazil's economy rested almost entirely on coffee production, he did little to help them during the hard times of the economic crash. In fact he seemed to due everything in his power to further alienate the powerful group of planters. Instead of continuing the federal subsidies that bought off surplus coffee to help inflate the international price, he discontinued it. Instead, he used that money to pay off the increasing loans made to creditors in the United States and England. This angered the politically powerful coffee planters, and in 1930 high military officers removed President Luis from power. This was not a bloody affair. There were no armed conflicts.
Getulio Vargas was placed in power by the military in November of 1930. He was not a politically popular person. He had lost the election earlier in 1930. However, he drew his power from the elite, which put him in power after the military coup. Vargas saw that Brazil's many problems stemmed from the fact that Brazil was really a loose confederation of twenty states. Therefore, his first acts as president were to unite Brazil. First, he replaced all of the state governors (except for Minas Gerias), which were extremely powerful people, with intervenors. These intervenors reported directly to Vargas and could be replaced at the President's will. Vargas also broadened his political base.
The next major step toward a strong central government came in 1932 when the state of Sao Paulo, largely coffee growers, revolted. They had become tired of the local intervenor who had not seen quickly enough to their demands. The revolt was quickly crushed in four months. Thus, the central government under Vargas was credited, while the state of Sao Paulo was discredited. In 1934 Vargas wrote and ratified a constitution that further limited states' powers. States could no longer tax interstate goods, nor raise a militia larger than the federal army. The constitution did, however, set up a bicameral legislature that would be directly elected, along with the president, by the people. The first president, however, was to be named by Congress. Vargas was chosen as President.
Vargas ruled as President of Brazil until 1937. Leading up to that year, Brazilian politics had been racing towards a feverish pace. The Vargas administration was being attacked on all sides, the strongest of which came from the Communist party. In 1935 a rebellion broke out in the northern states, led by communist leaders. Vargas immediately crushed the revolt and irradiated the communist parties on the left. Events seemed quieted until the years approaching 1938 when the first presidential elections were suppose to take place. These elections were not to take place. On November 10, 1937 Vargas announced the birth of the Estado Novo. The Congress had been dissolved and replaced by loyal military officers. Thus, began the Vargas dictatorship.
During the Estado Novo, Vargas had a politically free hand to do whatever he deemed worthy. He had no major political foes with which to do battle. One of the main questions that plagued the early years of the Estado Novo was who could best help Brazil reach sufficient international economic clout. Before 1937, Nazi Germany had a huge hand in modernizing Brazil's army and providing mechanics necessary for industrialization. However, with the rise of the Estado Novo, the United States took a more active approach to maintaining a favorable relationship with Brazil. The United States one out, after Germany's failure to provide promised military weapons. From that time on, Brazil became an important supplier of raw materials to the Allied war effort.
These raw materials did not come free of charge. In return for them, the United States invested huge sums of money in Brazil'' infrastructure. Highways, railroads, ports, and airports were constructed almost entirely from United States' funds. The United States also created the Brazil steel industry by funding Brazil's first steel mill. Vargas further industrialized Brazil by creating the National Motor Factory, which produced truck and airplane engines. Vargas allowed one union per economic sector. Thus, the labor force was effectively tied to the government. Because of these improvements, industry in Brazil quickly grew, although coffee still remained as the king of the exports.
In 1945, with the defeat of fascism in Europe, the political scene was becoming less and less friendly to Vargas. People were unhappy with the growing foreign debt and the runaway inflation rates. In October 1945, the military that had once supported Vargas deposed him. He was allowed to return to ranch in Rio Grande do Sul.
The Estado Novo was over. In its place the Second Federation would be created. However, this was not the end of Vargas' political career. In the first election, he was elected governor of his state. In 1950 he was again elected President, this time by means of a direct election. However, once again, he faced harsh economic problems. In 1954, unable to face the huge criticism from nearly every political sector, Vargas shot himself through the heart, effectively ending a political career that was highlighted by nineteen years as the Brazilian leader.
