264 CHAPTER 11 THE TRIUMPH OF NEOCOLONIALISM AND THE LIBERAL STATE, 1870–1900
A succession of liberal governments thereafter
gave primacy to export agriculture and fully en-
dorsed the international economic division of labor
that rendered Brazil dependent on foreign manu-
factured imports. “It is time,” proclaimed President
Manuel Ferraz de Campos Sales (1898–1902),
“that we take the correct road; to that end we must
strive to export all that we can produce better than
other countries, and import all that other coun-
tries can produce better than we.” This formula
confi rmed the continuity of neocolonialism from
the empire through the early republic. Determined
to halt infl ation, the liberals drastically reduced ex-
penditures on public works, increased taxes, made
every effort to redeem the paper money to improve
Brazil’s international credit, and secured new loans
to cover shortfalls in government revenues.
Coffee was king. Whereas Brazil produced 56
percent of the world’s coffee output from 1880 to
1889, it accounted for 76 percent from 1900 to
- Its closest competitor, rubber, supplied only
28 percent of Brazil’s exports in 1901. Sugar, once
the ruler of the Brazilian economy, now accounted
for barely 5 percent of the nation’s exports. Minas
Gerais and especially São Paulo became the pri-
mary coffee regions, and Rio de Janeiro declined in
importance. Enjoying immense advantages—the
famous rich, porous terra roxa (red soil), an abun-
dance of immigrant labor, and closeness to the
major port of Santos—the Paulistas harvested 60
percent of the national coffee production.
The coffee boom from the late 1880s through
the mid-1890s soon led to overproduction, falling
prices, and the accumulation of unsold stocks after - Because coffee trees came into production
only four years after planting, the effects of expan-
sion into the western frontier of São Paulo contin-
ued to be felt even after prices fell; between 1896
and 1900 the number of producing trees in São
Paulo alone went from 150 million to 570 million.
Large international coffee-trading fi rms controlled
the world market, and they added to planters’ diffi -
culties by paying depressed prices during the height
of each season and selling off their reserves in peri-
ods of relative shortage when prices edged up.
Responding to the planters’ clamor for help,
the São Paulo government took the fi rst step for
the “defense” of coffee in 1902, forbidding new cof-
fee plantings for fi ve years. Other steps soon proved
necessary. Faced with a bumper crop in 1906, São
Paulo launched a coffee price-support scheme to
protect the state’s economic lifeblood. With fi nanc-
ing from British, French, German, and U.S. banks
and the eventual collaboration of the federal gov-
ernment, São Paulo purchased several million bags
of coffee and held them off the market in an effort to
maintain profi table price levels. Purchases contin-
ued into 1907; from that date until World War I,
the stocks were gradually sold off with little market
disruption. The operation’s principal gainers were
the foreign merchants and bankers, who, because
they controlled the Coffee Commission formed to
liquidate the purchased stocks, gradually disposed
of them with a large margin of profi t. The problem,
temporarily exorcised, was presently to return in
an even more acute form.
The valorization scheme, which favored the
coffee-raising states at the expense of the rest, re-
fl ected the coffee planters’ political domination.
Under President Campos Sales, this ascendancy
was institutionalized by the so-called política dos
governadores (politics of the governors). Its essence
was a formula that gave the two richest and most
populous states (São Paulo and Minas Gerais) a vir-
tual monopoly of federal politics and the choice of
presidents. Thus, the fi rst three civilian presidents
from 1894 to 1906 came from São Paulo; the next
two, from 1906 to 1910, came from Minas Gerais
and Rio de Janeiro, respectively.
In return, the oligarchies of the other states
were given almost total freedom of action within
their jurisdictions, the central government in-
tervening as a rule only when it suited the local
oligarchy’s interest. Informal discussions among
the state governors determined the choice of presi-
dent, whose election was a foregone conclusion,
since less than 2 percent of the population was
eligible to vote. No offi cial candidate for president
lost an election before 1930. Similar reciprocal ar-
rangements existed on the state level between the
governors and the coronéis, urban or rural bosses
who rounded up the local vote to elect the gover-
nors and were rewarded with a free hand in their
respective domains.