San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley


Like Juan Peron in Argentina, Getulio Vargas gave Brazil an economic structure that it took many decades to reform. While Vargas was a better person than Peron nevertheless the legacy he left was still detrimental although perhaps not quite as detrimental as that of Peron. Both were ideologically corporatists but drifted into socialism in the latter part of their careers.

Getulio Vargas was born in 1882 in the southern-most state of Brazil, Rio Grande do Sul, a state of cattle ranching and gauchos. His family was prosperous and had political connections with the political boss (caudilho) of Rio Grande do Sul, Antonio Augusto Borges de Medeiros. Vargas held a political position within the Borges de Medeiros machine in Rio Grande do Sul. He served in the State Assembly and later as a congressman in the Brazilian Legislature in Rio de Janeiro. When Washington Pereira won the Brazilian presidency in 1926, in gratitude for political support by the Borges de Medeiros machine, he named Getulio Vargas as Finance Minister of Brazil. After a couple of valuable years of experience in national politics and finance Getulio Vargas returned to his home state to be elected governor in 1928.

In 1930 Getulio Vargas was selected as the candidate of the Aliança Liberal, (Liberal Alliance) for the presidency of Brazil. In the past the candidate selected by the party that controlled the government always won the election, by fair means or if necessary fraudulent means. Washington Pereira deviated from the past practice in selecting his successor. The Golden Rule of Brazilian politics required the presidency to alternate between São Paulo State and Minas State. Washington Pereira was from São Paulo so he should have selected someone from Minas as the presidential candidate. Instead he chose Julio Prestes from São Paulo. When the government declared its candidate, Julio Prestes, had won, the southern states of Brazil were enraged. When the vice-presidential candidate of the Aliança Liberal was assassinated the southern states rose up in rebellion and sent an army toward Rio de Janeiro to take control of the government. Vargas was one of the leaders of this army.

Getulio Vargas 1930
(at the right in military uniform)

The Army of Brazil did not want to fight a war against Brazilians to support a fraudulent election victory so it deposed Washington Pereira to keep him from turning the government over to Julio Prestes. The Army of Brazil then established a Junta Pacificadora which made it possible for Getulio Vargas to assume the presidency of a Provisional Government.

Vargas tried to negotiate internal harmony and reassure foreign governments of the good will of the new regime. Vargas gnerally worked to enhance the power of the federal government over the state and city governments. He created the post of interventor which was a federally appointed officer to take over the governance of some states and cities whose governors and mayors were not obeying the wishes of the Federal Government. Often the appointed interventor were members of the tenentes movement of lower level military officers who wanted the government to take a more active (corporatist or socialist) role in the economic development of Brazil. São Paulo rebelled against the rule of the interventor. São Paulo and other places were demanding a return to constitutional government.

In 1933 Vargas was elected to a four-year term as President of Brazil. Work began on a new constitution. Vargas wanted to have class representatives as well as representatives of geographic constituiencies. This class representation is a corporatist theme. Against opposition Vargas was able to have forty class representatives included with the 214 members of the legislature from traditional geographic constituencies. Opponents labeled the forty class representatives as the forty thieves of Brazilian sovereignty. The new constitution became effective in 1934.

In 1935 Luis Carlos Prestes, who had become the leader of the Brazilian Communists, initiated an attempt to take control of Brazil. The rebellion was quickly suppressed but the Communists had killed enough people to severely frighten the general public. Vargas used this Communist menace to declare a national emergency and to gain powers for autocratic rule. Luis Carlos Prestes was captured and imprisoned in 1936.

Getulio Vargas' term of office from his election in 1933 was due to end in 1937. He was prohibited by law from succeeding himself. He kept his intentions secret until the last minute and then carried out a coup d'etat and created a new political economic system which he called the Estado Nôvo (the New State). It was a corporatist state modeled on and named after the corporatist state of Antonio Salazar of Portugal.

The First Downfall of Getulio Vargas, 1946

Getulio Vargas became president of Brazil (again) with the creation of the Estado Nôvo in 1938. His legal term of office was due to expire in 1943. When 1943 arrived Vargas announced that because of the emergency situation concerning World War II he would continue in office but as soon as possible there would be a new election. In 1944 he made a similar public announcement. When the war ended it appeared that Vargas had no choice but to allow elections. The law at the time was that any government official choosing to run for a public office had to resign from office one year before the election so as put incumbents on an equal level with other candidates. When the deadline came for Vargas to resign if he were going to run for the presidency he did not resign. But it did not look as though he was intending to retire from the presidency in the foreseeable future. Other leaders in the government and the military suspected he would find an excuse to postpone the election and continue in office. A delegation representing a group of military figures confronted Vargas in October of 1945 and told him that he would have to relinquish power and would not be allowed to run for the presidency himself.

Vargas reacted to this ultimatum by saying that he would resist his removal from the presidential office building. He had weapons and he would fight even if it meant his death. One member of the delegation who had delivered the ultimatum told him that his removal would not involve a blazing gun battle; instead the water and electricity would be shut off and they would wait for Vargas to surrender. Vargas thought this over for a short time and then announced:

I would prefer that you all attack me and that my death remain as a protest against this violence. But as this is to be a bloodless coup d'etat, I shall not be a cause of disturance.

So, rather than face such an ignomious defeat with no glory, Vargas decided to give up the presidency of Brazil which he had held for a decade and a half.

The victor in the presidential election was Dutra and his victory came as a result of his endorsement by Vargas. Vargas was nominated for senator and for congressman in several constituencies without his seeking those nominations. He was elected as the senator from the state of Rio Grande do Sul and he accepted that office. He attended the meetings of the Senate in Rio de Janiero but largely retired from active political life for four years.

President Getulio Vargas 1932

(To be continued.)

The Final Downfall and Closing Act of Getulio Vargas

After Vargas' victory in the open election of 1950 he returned to the presidency. He however no longer had the autocratic power of the days of the Estado Novo. It was a troubled time for Brazil. Inflation was a chronic problem and large segments of the workforce found there pay increases were not keeping pace with the price level and they faced a declining standard of living. The legislature had its own agenda and Vargas was not able to cope with the economic situation. In 1953 he slipped and broke an arm and a leg. He suffered from depression and insomnia as well as a general lonliness. A factor that contributed to Vargas' depression was a realization that the Eisenhower Administration in the U.S. was not going to fulfill the promise of economic aid to Brazil made by the Roosevelt and Truman Administrations. The U.S. was no longer so concerned about keeping Brazil as an ally as it was during World War II. It was not a good time for Getulio Vargas.

Major elements of his political support were becoming critical of his administration. In the old days those supporters used to gather near where he was located and chant, "Getulio, Getulio! We Want Getulio!" They no long did this. Instead they shouted criticisms of his governance. Opposition political leaders were becoming more and more effective in their criticism of Vargas as well. And it was not as it was in the old days of Estado Nôvo in which opposition leaders could be quickly jailed and silenced.

Carlos Lacerda
One effective critic of Vargas was Carlos Lacerda. Lacerda not only was a politician; he also owned a newspaper. Lacerda's conservative liberal criticism of Vargas was particularly effective.

In 1954 there was an assassination attempt made on the life of Carlos Lacerda. Lacerda was only wounded but the Brazilian Air Force officer who was serving as his bodyguard was killed. There was public outrage and a strong suspicion that Vargas might have been behind the attack. The assassins wee identified and they identified Gregorio Fortunato, the head of Vargas' bodyguard, as the agent that arranged for the assassination attack. Fortunato, apparently without Vargas' knowledge or approval, sought to rid his boss of the annoyance of Carlos Lacerda. The Air Force investigation unit decided to search Fortunato's office to see if it could uncover any other assassination plots of the past, present or future. It found none but it did uncover records of influence peddling and other forms of corruption at high levels in the Vargas administration. The evidence did not implicate Vargas himself but he was responsible for not having kept his administration clean. The Air Force was insistent that Vargas must resign. The Navy backed the Air Force on this matter and the Army, after some hisitation, joined with the other services in called for Vargas' resignation.

On the night of August 24, 1954 there were crowds outside of the presidential offices shouting for Vargas to resign. When the military officers delivered the ultimatum for Vargas' to relinquish power he sat down and wrote out a note. He then went from his office into his bedroom and shot himself. His note, which was read to the crowd outside, said:

Once more the forces and interests which work against the people have organized themselves anew and breakout against me. They do not accuse me, they insult me; they do not fight me, they vilify me and do not allow me the right to defend myself. They must silence my voice and impede my actions so that I shall not continue to defend the people as I always have, especially the humble. I follow my destiny. After decades of domination and plunder on the part of international economic and financial groups, I placed myself at the head of a revolution and won. I began the work of liberation and I installed a regime of social freedom. I once had to resign but I returned to the Government on the shoulders of the people. The undergraound campaign of international groups joined that of national groups which were working against the policy of full employment. The excess profits law was held up in Congress. Hatreds were unleashed against the just revision of minimum wages. I wished to bring national freedom in the use of our resources by means of Petrobas; this had hardly begun to operate when the wave of agitation swelled. Electrobas was obstructed to the point of despair. They do not want the worker to be free. They do not want the Brazilian people to be independent.

I assumed the Government in the midst of an inflationary spiral which was destroying the rewards of work. Profits for foreign companies were reaching as much as 500 percent per year. In declaration of import values, frauds of more than $100 million per year were proved. With the coffee crisis the value of our main product rose. We tried to protect its price and the response was such violent pressure on our economy that we were forced to give in. I have fought month after month, day after day, hour after hour, resisting constant pressure, suffering everything in silence, forgetting everything, giving of myself in order to defend the Brazilian people who are now left deserted. There is nothing more I can give you except my blood. If the birds of prey want someone's blood, if they want to go on draining the Brazilian people, I offer my life as a holocaust. I choose this means of being always with you. When they humiliate you, you will feel my soul suffering at your side. When hunger knocks at your door, you will feel in your breast the energy to struggle for yourselves and your children. When you are scorned, my memory will give you the strength to react. My sacrifice will keep you united and my name will be your battle standard.

Each drop of my blood will be an immortal flame in your conscience and will uphold the sacred will to resist. To hatred I reply with pardon, and to those who think they have defeated me, I reply with my victory. I was a slave to the Brazilian people, and today I am freeing myself for eternal life. But this people, whose slave I was, will no longer be slave to anyone. My sacrifice will remain forever in their souls and my blood will be the price of their ransom. I fought against the exploitation of Brazil. I fought against the exploitation of her people. I have fought with my whole heart. Hatred, infamy and slander have not conquered my spirit. I have given you my life. Now I offer you my death. I fear nothing. Serenely I take my first step towards eternity and leave life to enter history.

When the crowd was told of Vargas' death and his message read to them they spontaneously broke into the old chant:

Getulio, Getulio! We want Getulio!

Within an hour the message was read over the radio to the whole Brazilian people. More or less spontaneously the anniversary of Getulio Vargas' death has become a day of national remembrance with most newspapers carrying multipage spreads comemorating Vargas' life. Brazil has chosen to remember the social welfare programs he initiated and to forget his dictatorial rule.

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