The Vargas Era (Portuguese: Era Vargas; ) is the period in the history of Brazil between 1930 and 1945, when the country was governed by president Getúlio Vargas. The period from 1930 to 1937 is known as the Second Brazilian Republic, and the other part of Vargas Era, from 1937 until 1946 is known as the Third Brazilian Republic (or Estado Novo).
The Brazilian Revolution of 1930 marked the end of the First Brazilian Republic. President Washington Luís was deposed; the swearing-in of president-elect Júlio Prestes was blocked, on the grounds that the election had been rigged by his supporters; the 1891 Constitution was abrogated, the National Congress was dissolved and the provisional military junta ceded power to Vargas. Federal intervention in state governments increased and the political landscape was altered by suppressing the traditional oligarchies of São Paulo and Minas Gerais states.
The Vargas Era comprises three successive phases: the period of the Provisional Government (1930–1934), when Vargas governed by decree as Head of the Provisional Government instituted by the revolution, pending the adoption of a new Constitution. the period of the Brazilian Constitution of 1934, when a new Constitution was drafted and approved by the Constituent Assembly of 1933–1934 and Vargas, elected by the Constituent Assembly under the transitional provisions of the Constitution, governed as president alongside a democratically elected legislature. the Estado Novo period (1937–1945), instituted when, in order to perpetuate his rule, Vargas imposed a new, dictatorial Constitution in a coup d'état and shut down the Legislature, ruling Brazil as a dictator.
The deposition of Getúlio Vargas and his Estado Novo regime in 1945 and the subsequent re-democratization of Brazil with the adoption of a new Constitution in 1946 mark the end of the Vargas Era and the beginning of the period known as the Fourth Brazilian Republic.
Downfall of the Old Republic
The tenente rebellions did not mark the revolutionary breakthrough for Brazil's bourgeois social reformers, but the ruling paulista coffee oligarchy could not withstand the economic meltdown of 1929.
Brazil's vulnerability to the Great Depression had its roots in the economy's heavy dependence on foreign markets and loans. Despite limited industrial development in São Paulo, the export of coffee and other agricultural products was still the mainstay of the economy.
Days after the U.S. stock market crash on 29 October 1929 (see Black Tuesday), coffee quotations immediately fell 30% to 60%. and continued to fall. Between 1929 and 1931, coffee prices fell from 22.5 cents per pound to 8 cents per pound. As world trade contracted, the coffee exporters suffered a vast drop in foreign exchange earnings.
The Great Depression possibly had a more dramatic effect on Brazil than on the United States. The collapse of Brazil's valorization (price support) program, a safety net in times of economic crisis, was strongly intertwined with the collapse of the central government, whose base of support resided in the landed oligarchy. The coffee planters had grown dangerously dependent on government valorization. For example, in the aftermath of the recession following World War I, the government was not short of the cash needed to bail out the coffee industry. But between 1929 and 1930, world demand for Brazil's primary products had fallen far too drastically to maintain government revenues. By the end of 1930, Brazil's gold reserves had been depleted, pushing the exchange rate down to a new low. The program for warehoused coffee collapsed altogether.
The government of president Washington Luís faced a deepening balance-of-payments crisis and the coffee growers were stuck with an unsaleable harvest. Since power ultimately rested on a patronage system, wide-scale defections in the delicate balance of regional interests left the regime of Washington Luís vulnerable. Government policies designed to favor foreign interests further exacerbated the crisis, leaving the regime alienated from almost every segment of society.
Following the Wall Street panic, the government attempted to please foreign creditors by maintaining convertibility according to the money principles preached by the foreign bankers and economists who set the terms for Brazil's relations with the world economy, despite lacking any support from a single major sector in Brazilian society.