184. Telegram From the Embassy in Brazil to the Department of State1

2002. For Ambassador Gordon. Examination of latest phase of crisis (ushered in by March 13 rally and President’s message to Congress) leads us to conclusion that there are dangerous elements present which have not previously existed—even at previous high-water mark of state of siege episode.2

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In broad terms, essentially new elements of current situation which increase criticalness are as follows:

There is general realization that Goulart has finally “defined himself”. This commitment (which seems much firmer and more explicit than anything Goulart has come up with in past) has thus far received sustained support of left as whole—including Brizola, PCB, various other groups and subgroups. Only small Amazonas group (CPB) has attacked Goulart’s new position. While same sort of coalescing of elements of left took place at time of state of siege, obvious and disturbing difference is that they then opposed President whereas they now support him.
This phase of crisis, unlike predecessors, thus far appears to be sustained push. Momentum of new Goulart offensive shows none of usual signs of let-up (e.g. rumors of dissention among left, back-offs by President, etc.).
While success or failure of October fiasco seems to have been— intentionally or not—geared to attempt on Lacerda, no such problematic wild card exists in current drive which seems carefully planned and appears to contain provisions for substantial flexibility in likely event that favorable Congressional action on President’s proposals not forthcoming.
Following factors bear on what Goulart might do in this case: (1) Goulart in various contacts has given impression that he does not necessarily expect Congress to accede to demands set forth in presidential message; (2) Goulart now appears to be sure enough of his power position to be willing to consider by-passing Congress (without necessarily closing that body); President’s confidence seems to be based at least partially on CGT threat of general strike if impeachment action started, CGT virtual ultimatum to Congress to act on proposals of presidential message by April 20, rumored possible declaration of military ministers in support of Goulart’s proposals, etc.; (3) among welter of rumors, two stand out which have unusual persistence and ring of authenticity: First, that if Congress does not act on request, Goulart will “decree” plebiscite on basic reforms, and second, that Goulart will continue to flood market with series of decrees (e.g. paper import monopoly, expropriation of petroleum distribution industry, etc.). Aside from probability or otherwise Goulart will actually take these steps, psychological effect on public of rumored impending action is very definitely such as to lead to continued high pitch of crisis.
Opposition—so far at least—has definitely not effectively coalesced position. There seems to be some individual and/or small group reflex reaction (talk about impeachment, Congressional withdrawal to Sao Paulo, etc.) but efforts to coordinate unified position in face of threat have not materialized. (Lacerda’s appeal to Adhemar and [Page 407] Juscelino to form common front has resulted in somewhat ridiculous poses of “I’ve always been a democrat; what’s new?” instead of any real cooperation.)

In view of above factors, we somewhat apprehensive that (1) if rapid deterioration of situation continues and (2) if opposition does not somehow rally, substantial amount of ground may be lost irrevocably. This leads us to wonder what actions within framework short term policy paper3 U.S. could take at this time to keep opposition from becoming overly demoralized in face of Goulart drive.

One suggestion we have for your consideration at present is as follows:

Discrete press leaks originating in Washington which clearly demonstrate concern of USG over recent turn of events in Brazil.
In view of fact that you are staying over after general departure of other LA Ambassadors from Washington, might it not be useful to have this played up as “extra and special consultation necessary in light of Brazilian situation.”

Incidentally, our contacts with U.S. business community in last few days have shown that most, if not all, view situation with alarm.

Brazilian business reaction appears similar, dollar on free market having gone from 1460 to 1640 in last two days, while stock market has dropped sharply (Embtel 2001).4

CAS concurs.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 15–1 BRAZ. Secret; Priority; Limdis. Repeated to Brasilia and Sao Paulo. Gordon was in Washington March 13–22 for consultation and the conference of U.S. Ambassadors and AID Mission Directors to Latin America.
  2. On October 4, 1963, Goulart asked Congress for a 30-day state of siege to restore order in the midst of general political unrest, including rumors of an impending coup d’état. Goulart withdrew the request 3 days later in the face of widespread opposition. On March 13, 1964, Goulart addressed a mass rally in Rio de Janeiro organized by the General Command of Workers (CGT). Earlier in the day the President had issued a decree to seize “underutilized” land within certain federal jurisdictions. At the rally Goulart signed a decree to expropriate all privately owned oil refineries. The next day, after signing a measure on rent control, Goulart called on Congress to amend the constitution as a means to promote other “basic reforms,” including the legalization of the Communist Party. In response to the President’s campaign, the opposition organized its own mass rallies, including the “March of the Family with God for Liberty” in Sao Paulo on March 19.
  3. For text of the “Proposed Short Term Policy Paper—Brazil,” September 30, 1963, see Foreign Relations, 1961–1963, vol. XII, Document 240.
  4. Telegram 2001 from Rio de Janeiro, March 18. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 2 BRAZ)