832.00 Revolutions/262: Telegram

The Chargé in Brazil ( Thurston ) to the Secretary of State

67. The situation at the commencement of the second week of the São Paulo insurrection remains indeterminate with conditions approximately as follows:

1. Military position. The Army and Navy continue to support the Government, although minor defections have been reported in addition to the general defection that took place in São Paulo. Federal [Page 402] troops are concentrated on the railway at the Rio de Janeiro-São Paulo border, where unimportant skirmishes have occurred. President Vargas visited this front yesterday. Warships are patrolling off Santos which is decreed to be closed to commerce.

The greater part of the State and Federal troops in Minas Geraes are believed to be with the Government, but the southern portion of the State, in which ex-President Bernardes resides, is now allied with São Paulo under his leadership, according to a high official of the Foreign Office with whom I have just spoken. Paraná is reported to have placed forces on the São Paulo border, but no engagements have taken place. Government reports indicate that a portion of the Federal forces in Matto Grosso have remained loyal. Troops in milder numbers have arrived from Pernambuco and Bahia, and others from Rio Grande do Sul. Contingents from other states are expected.

The reports from the Consulate General at São Paulo indicate that the State has formidable military organization and that it is inspired by a cause. Paulista forces control Santos and are placed at all threatened frontiers but apparently have not assumed the offensive.

São Paulo airplanes have flown over Rio de Janeiro several times distributing manifestos, and Government planes have endeavored to destroy military establishments in São Paulo.

2. Political status. At present the Government has the support of the northern States, although published reports of changes in naval and military commands in the Amazon would indicate that precautionary measures have been necessary.

Rio Grande do Sul, as shown by Consul Castleman’s telegrams, is supporting the Government but evidently only because the premature outbreak of the São Paulo revolt enabled the Interventor to establish control. The position of this State must be regarded as fundamentally doubtful.

Minas Geraes is in much the same situation as Rio Grande do Sul. The premature revolt enabled the State and Federal authorities to insure their control, which it now develops was strong enough to withstand an attempted coup d’état by Bernardes. On the other hand it was too weak to chastise him, and he apparently has turned over a part of the State to the Paulistas.

3. Economic conditions. São Paulo has resorted to the issuance of special currency obligations, the Government has decreed an emergency credit of 20,000 contos and the Commercial Attaché reports that another credit of $1,200,000 has been opened for the purchase of aeroplanes. Exchange on the unofficial market is over 18 milreis to the dollar. The Consul at Santos reports that no ships have entered since July 13, that all business is paralyzed and that shipments of coffee are suspended until further notice.

4. Peace moves. Despite alleged visits of emissaries, appeals by women’s organizations and efforts toward conciliation by the church, no progress is yet apparent. Rio de Janeiro is quiet and the public feeling is relatively apathetic.

5. General. São Paulo, with physical support available only from sectors of the Matto Grosso and Minas Geraes borders, is on the defensive but apparently determined to continue on the course set and hoping for favorable developments. The Government, either in the [Page 403] expectation that São Paulo will capitulate in discouragement or because it is mistrustful of it or of conditions in Minas Geraes and Rio Grande do Sul, has not assumed the offensive.

Under these circumstances a compromise arrangement would seem to be possible although the “Tenente” element is said to be urging an immediate advance on São Paulo.