on the World Today

SINCE the dawn of the twentieth century, if not longer, the strongest and most reliable ally of the United States among the Latin American republics has been Brazil. In world wars and power struggles, in emergencies of Hemisphere policy, Brazil’s support, whenever it has been crucial to us, has been forthcoming. One or two other republics—Uruguay and Costa Rica, for instance — have been perhaps more consistently in tune with North American political methods and attitudes. A few minor dictators have appeared who found it expedient to be more subservient than Brazil’s leaders. But Brazil, with nearly a third of the population of all the Latin American states and latent economic resources in proportion, has packed a decisive punch in dozens of Hemisphere squabbles and conferences. At the final count her government always has proved dependable.

This autumn, however, planners of Hemisphere policy in Washington have been shaken by indications that Brazilian friendship is slipping. Late in August, President Getulio Vargas, outstandingly colorful political figure in Brazilian history, was driven from office by a combination of uproar over administration scandals and demands from the high brass of the armed services. A few hours later, Vargas committed suicide by shooting himself in the heart.

The melodrama actually erupted from a mishmash of domestic issues. The regime, in office since Vargas’s inauguration as constitutional president in January, 1951, was undergoing a bombardment of charges of graft involving cabinet ministers and other high officials as well as members of the Vargas family. The masses of the population and most business groups were reeling from enormously inflated prices, aggravated by Vargas’s doubling of the minimum wage for Brazilian labor on May 1, and by the sharp decline—not to say collapse — of the coffee market in early July. The military, including the officers’ corps, were disaffected by the discriminations which the minimum-wage advance had worked against the army, navy, and air force.

Finally, a supercharged personal and emotional issue flared up in the midst of all this turbulence. On the night of August 5, an effort was made to assassinate Carlos Lacerda, editor of Rio de Janeiro’s Tribuna da Imprensa and a flamboyant political foe of Vargas, who had led the chorus for months in denouncing the regime. Lacerda was only slightly wounded, but his companion, a popular air force major, was killed. During the next two weeks a fantastically exploited man-hunt for the killers traced the assassination effort back to members of the Vargas bodyguard and produced enough circumstantial evidence to implicate Benjie Vargas, the president’s brother.

Vargas’s last testament

The excitement stirred up by these developments gave the military leaders plausible grounds for insisting that Vargas must leave the presidency or they could not be responsible for preserving order. Vargas at first publicly proclaimed that he would never quit office alive, but after a nightlong argument with his cabinet and the military chiefs he finally agreed to take a permanent leave of absence just before dawn on August 24. Less than four hours later, and before the presidency had been formally turned over to Vice President Joà Café Filho (“Filho” is the Brazilian equivalent of “Junior”), he was dead.

Yet almost within a matter of moments after his suicide Vargas transformed the domestic political crisis which had produced his downfall into a mourning orgy of nationalistic and and-American violence, with himself as the sacrificial hero. Always an expert at demagogic appeals, the old caudillo left behind a death message to the Brazilian people which was a masterpiece of issue-twisting and posthumous self-glorification.

“Once more,” the letter declared, “the forces and interests against the people are raised against me.” It spoke of “years of domination and looting of the republic by international, economic, and financial groups; of a “subterranean campaign of international groups joined with national groups working against excess-profit laws, against the minimum-wage increases, against government corporations for oil and industrial power development, and to break the price of coffee. “Foreign enterprises” whose import “frauds" against Brazil totaled “more than $100,000,000” were described in the document as “birds of prey” wishing “to continue sucking the blood of the Brazilian people.”

“I offer my life in the holocaust,” Vargas said. “I fought against the looting of Brazil. I fought against the looting of the people. . . . I gave you my life. Now I offer you my death. . . . Serenely I take the first step on the road to eternity and I leave life to enter history.”

The letter was released with the news of Vargas’s suicide. The crowds had gathered in the early morning of August 24 in Rio, São Paulo, Belo Horizonte (capital of the ore-producing state of Minas Gerais), and Porto Alegre (capital of Vargas’s home state of Rio Grande do Sul) to shout for the ousting of the president. Before noon they had converted themselves into roaring street mobs, fighting the police and military lines in Rio to attack the United States Embassy and American banks and business offices, and sacking the Porto Alegre and Belo Horizonte consulates.

Nowhere had the Vargas farewell letter specifically identified North American interests with the “international looters” of the republic. But the street mobs knew at least enough of the outstanding size of American investments and sales operations in Brazil and had heard enough chatter about “ Yankee imperialism” from their politicians to make their own identifications.

From the Communist underground, banners and placards were quickly purveyed converting the furious phrases of the Vargas letter into antiYankee slogans and reciting the whole list of “imperialismo’s” reputed crimes and abominations, from the Monroe Doctrine to last summer’s alleged intervention and overtbrow of free government in Guatemala.

The general strike fizzles

For nearly a week the turmoil continued. The first real break came when a general strike planned by Communist and fellow-traveling leaders to paralyze São Paulo and Santos on September 2 fizzled, attaining only about a third of its advertised strength and size. Many responsible labor leaders allowed themselves to be persuaded by the Café administration to talk over their grievances first.

In fact, the Cafe regime, by a combination of firmness and self-effacing calm, which evidently carried its own sense of rest and refreshment after the constant pyrotechnics of the Vargas era, managed to ride out the immediate storm. In spite of a continuous barrage from the mobs and the Communist and fellow-traveling press and politicians that he and his governing group were hired tools of Yankee imperialism, the new president picked a “caretaker” cabinet, mainly of technicians and shrewd political operators. He made a crucial decision that congressional and state elections set for October 3 would be held on schedule; and he used the armed forces to protect foreign and domestic interests from violence.

Meantime João (Jango) Goulart, the old caudillo’s former labor minister and chief rabble-rouser on the labor fronts, who is considered an important link between the Vargas regime and the Communists, was busy organizing a new political party for the presidential elections of 1955, using the Vargas “last testament” as its operating manual. His activities bear an ominous suggestion that Brazilian-American friendship may for the first time become an open campaign issue.

The Vargas record

The post-Vargas political situation is made for political promoters and adventurers of the Goulart type. Vargas had been the central force in Brazilian politics for a quarter of a century. He first seized the presidency in a military revolt during a confused election campaign in October, 1930. In 1932 he had himself formally elected, and in late 1937, using a Communist revolt of 1935 and a subsequent home-grown Fascist movement known as the Integralistas, promoted himself to be dictator. For the next eight years he ruled with considerably more geniality than Mussolini or Hitler, but with the essential machinery of totalitarianism. He maintained authority by issuing decrees, controlling the press, and suppressing civil liberties.

After the close of World War II he promised a return to constitutional democracy and free elections but he broke his pledge by indicating that he intended to be a presidential candidate himself. When it became evident that rigged polls might win him another triumph, he was driven out of office by a military putsch in November, 1945.

An unexciting staff chief, General Enrico Gaspar Dutra, was voted in as his successor, and Vargas, although elected senator from his state of Rio Grande do Sul, never took his seat and spent the next five years in retirement. However, his popular hold was so strong that in the 1950 elections he was chosen constitutional president by a decisive majority.

Vargas’s death has been followed by a sharp disintegration of the political parties which, whether pro or con, have existed mainly to revolve around his activities. The Brazilian Labor Party, which has been Vargas’s main source of support since 1950, has officially announced its complete renunciation of Café, his works and policies. So has the National Democratic Union Party, chief center of the Vargas opposition.

President. Café’s own party, the Social Progressives, is a minority group, and he was elected vice president only with the coalition support of the Brazilian Labor Party. But he has a chance, if his moderate program catches on, to win over dissidents in the stronger groups.

On the labor front, the Vargas regime’s intensive manipulation of the unions, reaching far back into the dictatorship period, has produced a crop of first-string leaders, more interested in political maneuvering than in working for the benefit of labor’s rank and file. In cases where old-line leaders have held out against political seduction, the Vargas-Goulart machine has made a practice of replacing them with Communists and their sympathizers, who have felt that a little temporary collaboration with the caudillo’s politics was a small price to pay for getting into key posts in the labor movement. Vargas’s death has opened the way for a struggle by local leaders and anti-Comnumists in the unions to oust the Vargas henchmen and the Communists as labor bosses.

Brazil’s economic frustration

Brazil is still in the grip of inflation, which cannot be checked by any feasible price control system and can only be further aggravated by government-prescribed wage increases or by the issue of more currency. Brazil’s dollar debts are close to the limit of its ability to pay, and its dollar shortages for all but essential imports are perennial.

Restrictions on payment of profits on foreign business enterprises have rendered Brazil’s economic climate unfavorable to long-term foreign investment. Brazil pats out more than a third of its dollar income on imported oil and gasoline, but prevents exploitation of its own petroleum deposits, and of other vast natural resources, by virtually prohibiting foreign financial participation in their development. By trying to establish as permanent prices the all-time highs of the 1954 coffee crop, it has incited competing Latin American countries to challenge Brazil’s dominance in the world coffee markets. Most of these crippling errors have been products of Vargas’s instinct for melodramatic, vote-catching action.

Since taking office, President Café has shown signs of trying to work his way out of the economic frustrations in which the Vargas legacy has trapped him. He has backed a profitsharing bill which would produce wage increases that Brazilian entrepreneurs could afford to pay without stimulating further inflation. Me has proposed a graduated income tax which would make the government co-sharer in the inordinate gains of Brazil’s millionaire profiteers. He has continued a foreign exchange auction system, devised by Vargas’s last finance minister, Oswaldo Aranha, to make more funds available for essential imports than for luxuries, and has suggested strengthening it.

In mid-September, Café made a radio speech to the nation facing the facts of a $250 million deficit in the 1955 budget and informing the people that their sole alternative to austerity was the issuance of additional currency — which could only lead to more inflation.

His early hints of policy revisions omitted any reference to restrictions on foreign capital or to the potential role of foreign investors in the development of oil and other natural resources. Café’s new finance minister, Eugenio Gudin, was counted on to discuss these subjects with American financiers, industrialists, and officials of the Export-Import Bank when he visited the United States in late September. Gudin’s appointment was considered significant because of his outspoken friendliness to foreign investors over a long period.

Once the new president attempts to lead his people into a program of concrete austerity for 1 he strengthening of their economic position, (he Communist claque and the Goulart rabble-rousers will subject him to a drumfire of accusations that he is starving the Brazilian masses to pay his debts to the imperialist Yankees. Should he go so far as to propose more liberal arrangements for foreign investors and to encourage their acceptance as partners in the exploitation of the republic’s natural resources, the drumfire will be stepped up.

Brazil needs to be won

Under the circumstances, Café needs help from the United States, but it must be adroit help or it will turn out to be a hindrance. The policy-makers would do well, for instance, not to begin with pronouncements that “we” are on the march to save Brazil from Communism. The Brazilians would rather perform that rescue operalion for themselves.

Secondly, our policy-makers need to avoid taking the “traditional” Brazilian-Ameriean friendship too much for granted. Like most international friendships, it was never so binding as it was represented. At the time of the fall of France, for example, Vargas was barely restrained by Brazilian Foreign Minister Aranha and American Ambassador Jefferson Caffery from easting his lot with the Axis. When he was driven from office in 1945, Vargas left in a fury with the United States because he attributed his downfall to a speech by Ambassador Adolph Berle, Jr., insinuating that he was false to his pledges of restoring democratic government .

In his last testament he gave expression to a passionate anti-Americanism which the Goularts and their henchmen may use to convince future Brazilians that the celebrated friendship with the United States was a sentimental folly of their pro-Vargas ancestors. In view of all this, the friendship of Brazil needs to be rewon.