CIW: THE BACKGROUND OF VARGAS'S RESIGNATION AND SUICIDE

Created: 8/27/1954

OCR scan of the original document, errors are possible

COPY NO. CI NO.74

Current

Intelligence

Weekly

OFFICE OF CURRENT INTELLIGENCE

SECRET

U. s. OfflGfttfs

THE BACKGROUND OF VARGAS' RESIGNATION AND SUICIDE

The resignation and suicide of Brazil's president Vargas onugust occurredackground of politicalwhich has as its immediate cause the discontent of the military and other conservative elements with the way Vargas and his clique ran the government. Underlying this however,eries of continuing, critical economic problemsearth of sound political leadership.

The succession of Vice President CafS Filho mayimprove the domestic political atmosphere, but will not necessarily provide solutions to the underlying problems. It will not alter Brazil's orientation toward the United States.

The current crisis was set off by one of the scandals which hadallmark of the Vargas administration. The alleged involvement of Vargas* brother and son and his personal Kuard in the attempted assassinationugust of an anti-Vargas newspaper publisher, which resulted in the death of an air force major, cameime of intense public anxiety over stalled coiiee sales and rapid weakening of the currency it rocked tbe nation.

Key figures in the armed forces, already concerned over the graft. Communist influence and economic confusion in the Vargas administration, saw the incidentinal challenge to their constitutional role as ultimate guardians of the nation's welfare. Their pressure, combined with the public statements of Brazil's two living ex-presidents, finallyatch for Vargas' previously successful techniques ofand distracting the opposition.

The suicide ofyear-old ex-dictator may preserve for his large following the cultivated myth of the indispensable man and great humanitarian, but it will not eliminate theand economic problems fostered by his rule. Foreign exchange and inflation crises have been chronic in postwar Brazil because of the country's limited and overpriced exports, its rapid industrial expansion, and its unrealistic social They have been aggravated, however,1 under the Vargas government, which encouraged an atmosphere ofconfusion and political dickering with economic problems. The political leaders needed to clarify and solve these problems have not yet emerged from the party organizations, all of which are relatively new and fluid and have in one way or another been manipulated by Vargas,

ug INTELLIGENCE 6

SECtWf

SECRET

The new president, Joao Cafe* Filho, faces not only these baste problems but congressional and state elections ln early October, ln which, until this week, the only issue was Vargas himself. An opportunistic professional politician. Cafe' Filho appears to have lived down his dealings with the Communists in5 election and has recently made speeches favoring private enterprise and the entry of foreign capital. Because of his background and because of the Vargas crisis, tbe araed forces undoubtedly willlose watch on the new president and will beosition to enforce their views. Since theleaders themselves are pro-Aaerican, domesticchanges are unlikely to bring any alteration ln Brazil's international orientation.

CURRENT INTELLIGENCE WEEKLY

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