#20357 - L4 The Vargas Era - Modern Latin American History

THE VARGAS ERA

First Republic – main features and issues

• Society: immigration, migration, population growth

• Economy: export, trade deficits, market disequilibria and constraints

• Demographic growth and change during the period

The First Republic

• In 1889 at the time of the declaration of the Republic, “Brazil was a country with a low population density,” with “vast areas in the north and west which were virtually empty or only sparsely populated” (p. 257).

• At a general level this demographic description Brazil can be extended to the whole of the Republican period, but there were some important changes during this phase; ones that continued throughout the twentieth century too.

Literacy m:f

1872 = 20:10

1920 = 30:20

National census

1872 – 9,930,478

18902 – 14,333,915

1900 – 17,438,434

1920 – 30,635,605

Urban population

1872 = 8%

1920 = 17%

• The two main features of demographic change during the First Republic are immigration and urbanisation.

• As this chart illustrates, the two decades preceding the First Republic - the 1880s to 1890s - was a phase of increased immigration in which Italians were by far the majority group.

• This was a period when coffee planters were looking to replace formerly enslaved labour with immigrant labour as well as increase labour. Immigrants were attracted (during this period) by the Brazilian governments assisted programme of paid passage. Almost 80 per cent of immigrants who arrived in Sao Paulo in between 1890-1900 had their transport paid.

• This trend was reversed by the end of the nineteenth century. Brazil entered a period of over-production and crisis in the coffee economy. And in 1902 the Brazilian government embarked on a policy designed to limit the creation of new coffee plantations in Sao Paulo.

• All the same, European immigration continued to Brazil, and while the numbers of Italian immigrants declined, those from Spain and Portugal grew.

Immigration, 1880 – 1969

Distribution of population by regions

• Here’s a different perspective on demographic growth and change from the colonial period to the end of the twentieth century. Here you can see the long term trends in population change.

• Looking at this graph from Skidmore (based on a much earlier study by Merrick and Graham), the rise of coffee, resulting immigration and internal migration led to a geographic reconfiguration of the Brazilian population.

• This reconfiguration began at the beginning of the twentieth century and continued through the century.

• As the centre of economic gravity shifted southwards, so did the population with the majority of Brazilians living in the Southeast by the turn of the century (1900).

• A trend which continued throughout the twentieth century, and even after coffee ceased to me the main feature of the Brazilian economy.

• In sum, the proportion of Brazilians living in the Northeast continued to decline as the proportion of those living in the Southeast and South continued to rise.

Demographic change and urban growth

• Immigration approx. 3m (during First Republic)

• Italians = 35%; Portuguese = 29%; Spanish = 14%

• São Paulo state, receive 54% immigrants

• By 1920: 71% Italians, 78% Spanish, 87% Japanese immigrants resident in SP state (mostly family-owned farmers)

• Portuguese: mostly urban, SP & RJ

• 1920: 93% foreign born = resident in South & Centre South

• 1920: national rate of illiteracy = 73 %, Immigrant illiteracy rate = 53 %

• 1920 urban growth

• SP: 5^th largest city 1890, 2^nd largest city 1900

• SP fastest growing city of First Republic

• 1920s: SP takes over RJ industrial production

• WWI: boost for Brazilian industry (textiles, steel, cement)

Society of First Republic: summary

• Population doubles, 1890-1930: 14m to 27m

• Population growth: south & south east

• (Rio de Janeiro & Sao Paulo)

• Urbanisation & European immigration

• (Portuguese, Spanish, Italian)

• 1920 half national urban population in sp & rj

• Late 1920s, internal migrants surpass number of immigrants

• 1920s Brazilian labour & population

• Predominantly rural

• Agriculture = 70%

• Industry = 14%

• Services = 16%

First Republic: Trade and debt

• Over half foreign capital = government (loans)

• Infrastructure, transport, banks = foreign funded

• Brazil not dependent on single nation/customer: UK, US, Germany, Canada, France

• Britain, chief supplier manufactured goods & credit

• US largest importer 1920s

• WWI - weakened economic position of Brazil; access to Germany closed off; other trading partners reduced capacity

• Increased competition key exports (coffee, rubber, cotton, sugar)

• 1928: Brazil, largest foreign debt in Latin America

Economy

• COFFEE was first introduced to Brazil in the 18^th century, in the north state of Para, but it did not thrive

• By the 29^th century, coffee was found to be highly suited instead to the climate and soils of southeast Brazil

• Growing, harvesting and transporting coffee did not rely on complex industrial processes

• Coffee was grown elsewhere in the world even in the 19^th century, but during the 1880s the main areas in India had been ravaged by blight

• Brazilian coffee was low grade, and cheaper than the coffee produced by Latin American competitors

• The main market for Brazilian coffee was the US

• Prices were low and demand high

• During the First Republic, Brazil supplied more than half the coffee sold on international trade

• Between 1925-29, coffee provided 75% of foreign earnings for the Brazil government

• The history of the coffee industry in Brazil during the First Republic is shaped around the terms of Valorisation

• This is a process by which the Brazilian government guaranteed a market price for Brazilian coffee by controlling foreign exchange rates as well as the supply of coffee to international markets

• The first major round of valorisation took place in 1906

• By 1906, the large supply of coffee from an ever-expanding range of global suppliers, had decreased the price of coffee on the international market

• To protect the Brazilian coffee industry—and the interests of the coffee planter elite— the Brazilian government established a mechanism for fixing the exchange rate and not allowing it to rise. The government also agreed to buy up Brazilian coffee when the harvests were abundant and later sell it on the international market when prices were more favourable

• The second valorisation took place in the middle of the crisis of WWI. The Brazilian government bought and warehoused almost 200,0000 tons of coffee. Thus, prices climbed sharply, and government made a profit – but partly due to sharp frost in Sao Paulo which curtailed production

• The federal government decided to end its participation in the valorisation scheme, but São Paulo state was hounded by its planters to take on the purchase of coffee unilaterally, a position it maintained until the crash in 1929

• From the 1850s to the 1960s coffee consistently accounted for over 50% of Brazilian exports.

• Brazilian coffee still accounts for around a third of world coffee production and Brazil is still the largest producer of coffee, a position held for the last 150 years

• RUBBER constituted the second most important export commodity and accounted for around a quarter of Brazilian exports in terms of value at the beginning of the 20^th century

• This meant that some of the regions most distant from the center of power in Brazil took the lead in processes of urbanization and modernization

• Belém, the capital of Pará state, as well as Manaus, the capital of Amazonas, were the most developed and prosperous cities in Brazil during the rubber boom

• They were in strategic sites, and prominent men in the rubber industry – foreign and Brazilian - built their numerous and wealthy residences in each city. These citizens created the demand that led to both cities being electrified and given running water and sewers

• Brazilian rubber went from boom to bust in quick succession

• There was a huge surge in demand at the end of the 19^th century and rubber gatherers spread the length of Amazon

• Prices rose as did exports and exponentially so. As well as this, Brazil’s rubber seeds had been transplanted in the Far East and plantation were set up which produced rubber at a much lower cost

• SUGAR not only failed to compete with regional and global competitors, but also with new sources of sugar in the form of European sugar beet

• Although there were brief periods of increased production and exports, Brazilian sugar does not enter into a genuine phase of expansion again until the end of the 20^th century

Economy: restraints and rifts

• External

• Export sector dominates

• Boom to bust: rubber, cotton, cacao, coffee

• Increase reliance: coffee

• Increase competition world markets (US protectorates)

• Increased indebtness

• Imports increase

• Poor balance of trade

• Internal

• Constraints on internal development

• No true national market; difficult to develop

• Urban population concentrated in port cities

• Poor internal transport links

• Coastal trade poorly maintained: expensive and old steamships

• Barrier to inter-regional trade

• Surplus income limited

1920s Brazil: workforce

• National population = predominantly rural

• Urban population; 17% national population

• 50% national urban population

• Workforce: Agriculture (70%), Industry (14%), Services (16%)

• Average lifespan; 35 years

• Malnutrition, parasitic and preventable disease

• Literacy; Females (20%), Males (30%)

Economy of First Republic

• High level of dependency on single export crop

• But Brazil not dependent on single nation/customer for exports

• High level of government intervention to support economy based on coffee

• Over half foreign capital = government (loans)

• ...