Brazil and the Great Depression

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  • Brazil and the Great Depression
    • 1920s
      • Dependent on agriculture, particularly coffee
        • Coffee exports over 70% of revenue
        • Sao Paulo Institute for Permanent Defense of Coffee created in 1925
          • Institute purchased and withheld goods from the global market to keep prices high
          • Limited Brazil's dominance of the international market
          • In 1927, all time high 27 million coffee bags produced and Institute prevented a price fall by buying the bags when the global coffee price fell
      • Foreign debt was $900 million and $175 million per year of loan repayments were paid out
        • May 1929 world coffee price fell fast whilst Brazil had a huge surplus
          • Weakened Brazil's economic standing
    • Brazil after the Wall Street Crash
      • Devastating impact on export economy
        • In Sept 1929 coffee sold at 22 cents per pound, Dec 1st had fallen to 15 cents
        • Sao Paulo faced bankruptcy and pleas for government assistance was denied by President Washington Luis
          • His unwillingness to help increased resentment
      • Shop owners reported 40% sales decline in Dec 1929
      • Prestes won the March 1930 elections
        • 29 million coffee bags were produced and prices dropped again
          • Coffee prices fell to 10 cents per pound and debt increased to $1,181 million
      • Landless laborers were not paid and faced starvation
        • Led to urban migration
    • Vargas
      • Oct 24 1930 a revolutionary junta was formed
        • Nov 4th Vargas was installed as provisional president
        • 1937 Estado Novo created
      • National Department of Coffee created
        • Coffee tree planting reduced from 3 billion to 2.5 billion
        • 1939 60 million coffee bags burned
          • Cotton production rose from 2% to 18% of exports
            • Led to increasingly diversified economy

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