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Economic Depression and Politics in Latin America

Democracy, Fascism and Repression in South America | Central America, 1929-35 | Cuba, the Dominican Republic, Haiti and Mexico, 1929-35

Democracy, Fascism and Repression in South America

Uruguay was a nation proud of being world champions at soccer. Twice they had won the gold medals in soccer at the Olympics. And Uruguay was unique in other ways. It was the only state in South America that recognized the Soviet Union. Uruguay was a constitutional democracy led by intellectuals from the professional classes. They gave the country national insurance, old age benefits, the eight-hour work day and worker's compensation. Some public utilities had been nationalized. To the displeasure of the Church, Uruguay legalized divorce and ended the Church's monopoly in education.

With the Depression's tensions Uruguay's neighbors, Brazil and Argentina, feared uprisings among their own people. Viewing Uruguay's relations with the Soviet Union, they accused Uruguay of serving as the focus of Communist infestations that threatened their nation.

The collapse in demand for wool and other products from outside Uruguay brought economic depression to Uruguay. Uruguay's president since 1931, Gabriel Terra, dissolved Congress in 1933 and began ruling by decree, temporarily disrupting Uruguay's democracy.


Just north of Uruguay, Brazil had enjoyed prosperity after World War I, but its government had squandered money and had accumulated a large internal and foreign debt. Then came the Depression, which hurt Brazil's major industry – coffee. Brazil's coffee kings and many coffee merchants fell into bankruptcy, and unemployment rose in the cities. In 1930, a rebellion brought the president of one of Brazil's provinces to national power -- Getúlio Vargas. Vargas suppressed a revolt against him that broke out in Sao Paulo, and he allied himself with an anti-Semitic fascist, Plinio Salgado.

Salgado was subsidized by wealthy German-Brazilian industrialists and by the German Embassy. His slogan was "God, Nation and Family," and he had several thousand street fighters who wore green shirts. Salgado's movement gained supporters from many leading families and had secret adherents in the army, navy and in the government's bureaucracies. In 1933, President Vargas disbanded Congress, declared martial law and warned the nation against a threat from Communists. Salgado offered Vargas 100,000 armed followers to protect the nation. Vargas accepted their support and helped them set up headquarters in Rio de Janeiro.

President Vargas created a new constitution, established the eight-hour work day, abolished child labor and provided medical care for sick workers and expectant mothers. He ruled the nation with dictatorial powers and controlled the press. He jailed editors and he filled Brazil's prisons with more political prisoners. He appealed to the nation with the slogan "Brazil for the Brazilians." He claimed that his rule was democratic and that he had a direct connection to all Brazilians. He established good trading relations with Germany, and by 1937 Brazil was buying twice as much from Germany as it was from Great Britain.


The Depression also brought an anti-Communist and dictatorial regime to power in Argentina.  Politics in Argentina, like some other Latin American nations, involved a conflict been the owners of great stretches of agricultural land on one hand and industrialists and professionals on the other – not unlike the conflict between aristocrats and the bourgeoisie in Europe in the 1800s.

Argentina was largely a nation of immigrants from Europe that had been ruled by an oligarchy of landowners until World War I. In 1916, Argentina had its first free elections, with a secret ballot, and in this election the opposition party, the Radicals, came to power. The Radicals was a party ostensibly devoted to free enterprise and industrial expansion but sympathetic toward workers and in favor of social reform. With its exports of meat and cereals, the country prospered, and wealthy young Argentinean men became a common sight in Paris and other places of glamour outside Argentina. The government of the Radical Party was at odds with the landed elite.

When the world's economic depression hit Brazil, the Radical Party and the nation's president, Hipólito Irigoyen, were blamed for the hard times. Irigoyen was also blamed for having made a trade agreement with the Soviet Union, and the military used this as an excuse to seize power.

The leader of the coup in Argentina, General José Uriburu, made himself president. He instituted terror and torture, and he intervened in twelve of Argentina's fourteen provinces to suppress discontent and opposition to his regime. Uriburu increased the pay of his base of support: the army. He prohibited the Radical Party from participating in elections.

In November 1931 a candidate of Uriburu's choosing, General Augustin P. Justo, was elected president. With the Radical Party thoroughly defeated, Justo pursued moderate policies and reforms and brought a return of honest elections.


With the coming of the Depression, conflict and repression intensified also in Peru.  Before the Depression, Peru had been led by military men  – men involved in Peru's war with Chile. Peru's president was Augusto Bernadino Leguia, a dictator who was criticized for his compromise with Chile. When the Depression came he was blamed for it, criticized for his financial dealings and for his harsh rule. In 1930, General Luis M. Sánchez Cerro led a coup against Leguia's eleven-year dictatorship.

In elections in 1931, a Leftist coalition, led by a group called the Popular Alliance of Revolutionary Americans (APRA), out-polled General Cerro, but the counting was done under Cerro's bayonets. Cerro remained in power, but the popular coalition led an uprising. The insurgents executed some sixty army officers, and the army killed at least 1,000 of the insurgents and their sympathizers, using aerial bombing for the first time in South America's history. Under President Cerro, all political activity, debate and most newspapers were silenced. Thousands were jailed – some of them chained to walls in the fortress near downtown Lima.

In 1933 Cerro was assassinated, and to restrain ensuing turmoil, the Constituent Assembly proclaimed a former president, General Manuel Oscar Benavides, president for completion of the period initiated by Sánchez Cerro. Benavides promoted public works and labor legislation. He encouraged education and sanitation, and he released political prisoners. He outlawed the Alianza Popular Revolucionaria Americana (APRA), a political party that advocated Latin American unity, nationalization of foreign-owned enterprises, and an end to the exploitation of Indians. Benavides claimed that it was an international party prohibited by the Peruvian Constitution. He called for presidential elections in 1936, but the results were annulled when the results favored Luis Antonio Eguiguren who, according to the government, was supported by the APRA. Benavides continued as president until 1939, governing under the motto "Order, Peace, and Work." He strengthened the Armed Forces and purchased modern armaments and completed Peru's portion of the Pan- American highway.


The Latin American nation hardest hit by the Depression was Chile, and it caught a repressive military regime in power. The unemployed and students rioted, and in 1931 the regime's leader, Carlos Ibáñez, escaped over the Andes Mountains into Argentina. The movement that overthrew Ibáñez drafted a liberal professor of law, Juan Esteban Montero, to run for the presidency, and he won. But political turmoil soon followed.

In June 1932, a military coup established what was called a socialist republic. Chile's Communist Party and trade unions rejected the coup because it was associated with the military, and Chile's conservatives were also against it. The socialist regime placed in power the former ambassador to the United States, Carlos Dávilat. The new regime ordered a half-million free meals served daily by the government to Chile's unemployed. After only a few days in office the government was short of funds and ordered the police to raid all the jewelry shops in Santiago, giving the jewelers a receipt which they could exchange for paper pesos. Washington withheld recognition from the Dávila regime, and in September another military coup ousted Dávila.

In December 1932 quarrels within Chile's military resulted in its putting in power a former Liberal Party president, Arturo Alessandri, now a Conservative. In the mid-thirties fighting broke out between socialist and fascist groups, and Alessandri asked for dictatorial powers with which to suppress communism. In 1936, Ibáñez, back from Argentina, tried to seize power with the help of  fascists, but the coup failed. In preparation for elections scheduled for 1938, Alessandri's government banned fascist mass meetings and parades. The fascists responded by trying to seize buildings near the presidential palace, but the rising was easily crushed, and the fascist leader, J. González von Marées, received a twenty-year prison sentence. Alessandri remained in power to the end of 1938. He was succeeded as president by Pedro Aguirre Cerda, a popularly elected member of the center-left anti-clerical Radical Party.


In Colombia it was the conservatives who were in office when the Depression hit. The public voted President Miguel Abadía Méndez out of office and elected in his place a member of the Liberal Party, Enrique Olaya Herrera. Another Liberal, Alfonso López Pumarejo, was elected president in 1934. He established constitutional reforms, the eight-hour workday and the right of labor to strike. The Liberal Party was to hold power until 1946.


In Venezuela the Depression caught the dictator Juan Vicente Gómez in office. Gómez had been in power since 1908 and had amassed a fortune. He used spies and torture, and he put dissidents into dungeons. But he had been careful not to neglect bestowing favor to the military, upon whose support his power rested. Gómez died in 1935, and pent-up resentment against him and his rule resulted in people sacking and burning the homes of the Gómez family and his henchmen. General Eleazar López Contreras succeeded Gómez, and he promoted public works as relief. Civil liberties for a time were respected, but López Contreras responded to strikes and disorders by repressive measures against what his regime labeled as agitation by communists and anarchists.

Bolivia and Paraguay

Bolivia and Paraguay had been too busy warring with each other over territory and oil to be impacted politically by the Depression. Their fighting ended in 1936, and that year in Paraguay Colonel Rafael Franco took over the presidency. He intended to establish a fascist regime modeled after Mussolini's Italy. Paraguay's army overthrew him a year later and re-established civilian rule, giving power to Felix Paiva, a university president. The formal settlement between Bolivia and Paraguay came in 1938, while in Bolivia a 34 year-old Lieutenant Colonel, Germán Busch, became president under a new constitution. In 1939, Busch died mysteriously. It was said that he had committed suicide, but his backers believed he had been murdered, and they began a new movement in Bolivia called the Movement of National Revolution (MNR).


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