832.00 Revolutions/274: Telegram

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

69. Military operations have been somewhat accelerated during the last few days, with advantage to the Government arms. Federal forces are reported to have recovered from the insurgents several places in southern Minas Geraes, and the Rio Grande do Sul forces have captured the strategically important fortified town of Itarare on the Paraná border and are now on São Paulo territory. The several engagements are believed to have involved reasonably severe fighting with corresponding losses.

Student disorders, based upon bona fide student grievances, but which apparently assumed some political character, occurred here yesterday and the day before. On each occasion conflicts with the police took place. It is reported that anti-Government and pro-São Paulo cries were heard during the disorders, but whether they were uttered by the students or by agitators taking advantage of the situation is not known. More popular animation is becoming apparent.

Former Minister of Justice Cardoso has been here for several days conferring evidently as spokesman for Rio Grande do Sul with the Vargas government. It is evident that conferences likewise are in progress with Minas Geraes. While no information is available with [Page 407] respect to these conferences it is to be assumed that they concern peace measures. In this connection an official announcement was published today by the Ministry of Justice asserting that the attitude of the Government with respect to peace has been made clear in public documents, this presumably refers to President Vargas’ reply to Bishop Becker of Porto Alegre in which he stated that peace could be achieved should the rebels lay down their arms, and to the President’s proclamation in which he stated that he would not capitulate before the demands of armed rebels but would be forgiving to those who surrendered. This proclamation ends with the statement that Vargas would prefer death as a soldier in defense of the ideals of the revolution (1930) to surrender in the face of threats or violence.

The Government has decreed that any Federal impost or taxes paid to the insurrectionist authorities will be considered as not having been collected and that all issues of securities or other forms of credit or fiduciary values as well as all banking operations executed by the insurrectionary authorities and falling within the competence of the Union will not be recognized by the Federal Government.