Causes of the Great Depression!

1. Dominance of the Coffee Oligarchy of Sao Paulo and Minas Gerias-

a) Constitution of 1890 b) undermined the growth of industryc) instituted policies that squashed social

and economic forcesd) The Presidential succession.e) Economic Dominance of Sao Paulo

2. Political Crisis in 1920s showed some of the problems with the “democracy”.

a) 1922-1926- Tennetesb) Challenge to the coffee oligarchy

Causes of the Great Depression1. Economic Development

a. Finance Industryb. National Debtc. Sugar to coffee.d. Regional economies built

around exports.e. No diversification in the

economy. f. Defense of coffee -1902-1930

a. Valorizationb. Controlling production

policiesc. The price supports induced

huge overproduction

Causes of the Great Depression1. . 1. Economic Development- continued

a. Foreign Dependence a. By 1930 the foreign loans were 1 billion and

200 million annually.b. Economic and social neglect

a. Industries geared toward the internal market

b. Majority of the populationc. Lack of economic infrastructured. Feudal system

c. Land ownership: 461 land owners held more than 27 million hectares of land, While 464,000 owned 15.7 million acres

d. Poor agricultural practices led to declining crops- a. Slash and burn methodsb. Used hoes and other hand techniques with

no mechanization

The Depression and Revolution Mendes Fradiqu once noted “The twenty states of Brazil are

two: Sao Paulo and Minas Gerius.”1. Two Major shifts that led to political and economic

upheaval. a) Political Error: Washington Luis made the political

error of selecting another Paulista as his successor, Sao Paulo had lost much of its support.

a) The politicians of Minas Gerais were no longer in alliance.

b) The non-coffee states protested that another coffee interest president would rule.

c) Getulio Vargas ran against Julio Prestes. d) Military stepped in and deposed the hand picked

supporter Prestes. Put Vargas in control as a interim president.

a) Like the Red Sox and Yankees

The Depression and Revolution b) Wall street Crash of 1929

1) How many of your families buy as many lattes as they did before the current depression?

2) Coffee Prices- collapsed3) inflation was rampant and had

no ability to borrow money. 4) Ability to import collapsed

1) coffee income provided most of Brazil’s foreign exchange needed for imports and to service the foreign debt.