Between 1887 and 1914, Brazil experienced what many other Latin American countries and the United States were going through: an immigration boom. During this period alone, close to three million people left European and Asian countries (notably Japan) and resettled in Brazil. The largest group among the immigrants was Italians, followed by Iberians, first the Portuguese and then the Spanish. The attraction was a booming commodities-based economy, itself based on one particular good: coffee. By the time of the Great Crash of 1929, an estimated 70% of the world’s coffee production took place in this enormous South American Portuguese-speaking nation. A combination of immigration and the rapid shift of the Brazilian economy to industrial-style agriculture brought about an urbanization boom with cities like Sao Paulo increasing in the decade before 1900 by 300%.
Politically, Brazil was a “republic” though one in which the central government was weak and powerful provincial governors acted as arms of the coffee magnates. The first Brazilian Republic (1889-1930) was more a collection of provincial oligarchies than a strong, centralized republican nation. These oligarchs were concerned with two related things. First, they wanted to maintain or even increase their control of over coffee production. Second, they wanted to suppress the growing political and economic dissatisfaction of the middle and lower classes, especially the peasants. The most noteworthy move that the central government made in these years was its creation of a program of buying surplus coffee in order to keep the coffee price stable, a policy that guaranteed windfall profits for large-scale producers. This was partially successful until 1929 when the price of coffee on the world market collapsed to 30% of its former value, shattering the Brazilian economy.
Brazil from 1914-1929 demonstrated characteristics common to many Latin American countries in this period. Its economy was dominated by a cash crop and a powerful oligarchy, which had entrenched itself in positions of political power, this time on the regional instead of the national level, as in Argentina. The economy was mostly agricultural-based, though the interruption caused by WWI of European goods forced Brazil, as it did some other nations of Latin America, to start some light industrialization. This type of industrialization, known as “import substitution industrialization,” gave rise to a small but growing class of urban workers. At the same time, foreign investment into the Brazilian economy was growing with the United States replacing Great Britain as Brazil’s largest financier. Most of the country’s heavy industry was financed and owned by foreigners, including the key transportation and utilities sectors. Coffee, for example, might have been growth, harvested and sold by Brazilians, but it was transported by rail and ship and then processed by U.S. and European private corporations. Heavy industrial materials, such as steel, also came into Brazil from beyond its borders. No indigenous steel industry, the backbone of the industrializing world, existed in Latin America until after the Second World War. In the cities, social differences were becoming increasingly apparent.
While the middle and upper classes were gravitating toward a Europeanized identity, the lower classes were becoming hostile to the economic domination of foreigners. Mass culture, like the burgeoning film industry, was in the hands of U.S. producers. In Brazil and across Latin America during these years some 90% of all films came from the Hollywood studios. As in Cuba, the Brazilian social system was in for a deep shock when the bottom fell out of the world economy in 1929. We will see later in the semester how this economic crisis, coupled with the unstable political terrain in Brazil, brought down the oligarchic republic and gave rise, as in much of the world, to extremism during the 1930s.
