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http://journals.cambridge.org/LAS
Richard Downes
Journal of Latin American Studies / Volume 24 / Issue 03 / October 1992, pp 551 - 583
DOI: 10.1017/S0022216X00024275, Published online: 05 February 2009
RICHARD DOWNES
While the war slowed capital formation, new domestic and foreign
demand created by wartime interruptions in world trading patterns
stimulated increased production in food and textile sectors. For example,
exports of five major commodities (rice, beans, sugar, meat and
manganese) rose from a mere $3 million in 1914 to over $62 million by
1917.2
Growth in the 1920s taxed the transportation system beyond its
capacity. Manufacturing output rose by nearly one-third, with especially
strong increases in chemicals, pharmaceuticals, food products, beverages
and metal products. By the mid-1920*5, Sao Paulo state was experiencing
severe transportation shortages that epitomised the deficiencies of the
existing transportation system. 'The great economic expansion of Sao
Paulo state since 1911' had taxed railroads beyond their capacity: whereas
the railroads had been required to transport only 350,000 sacks of produce
in 1911, by 1924 approximately ten million sacks awaited movement.
Movement of cattle by rail had begun only in 1912 and reached 700,000
head by 1915. By 1924, though, the cattle industry required shipment of
over 2,500,000 head of cattle. Lack of adequate transportation caused sacks
of cereal to 'rot and face the consequences of weather', making farmers
the 'principal victims' of a system unresponsive to their needs.3
Such calamities exposed the turn-of-the-century weaknesses of Brazil's
railroads, inadequate for a more diversified economy because of their
traditional orientation to the fortunes of two principal export crops: coffee
and sugar. In south-central Brazil, most rail systems had been borne with
a single-minded pursuit of coffee's expansion through Rio de Janeiro's
Paraiba Valley and then onto the central plateau during the latter half of
the nineteenth century. In the northeast, railroads depended as heavily on
sugar and focused almost exclusively on serving coastal lowlands in Bahia
and Pernambuco where sugar dominated. Farmers who raised crops in the
vast interior found that' freight rates charged by the railway together with
the costs of reaching the railway' made their use uneconomical, and
cotton growers preferred to hire horses to carry their loads to Recife over
300 miles of 'bridle paths, and often very bad ones at that'. 4
The railroads' strong ties with British entrepreneurs and financiers and
the consequent need to pay dividends and loans in foreign currency
2
Werner Baer, The Brazilian Economy: Growth and Development, 3rd edn. (New York,
1989), pp. 25, 28, 30 and 32. E. Richard Downes, 'The Seeds of Influence: Brazil's
"Essentially Agricultural" Old Republic and the United States, 1910-1930', (PhD
Diss., Univ. of Texas at Austin, 1986), p. 214.
3
Baer, The Brazilian Economy, p. 27; Kevista da Sociedade Rural Brasileira (SRB), vol. 4
(1924), pp. 113-4.
4
John C. Branner, Cotton in the Empire of Brazil: The Antiquity, Methods and Extent of its
Cultivation; Together with Statistics of Exportation and Home Consumption (Washington,
1885), pp. 25-6; Joao Dutra, 0 sertao e 0 centro (Rio de Janeiro, 1938), p. 163. See also
Julian S. Duncan, Public and Private Operation of Railways in Brazil (New York, 1932).
1,600
1,400
1,200
1,000
800
600
400
200
12
Roy J. Simpson et al., Domestic Transportation: Practices, Theory, and Policy (Boston:
1990), pp. 62-3; Enrique Cardenas, La industrialisation mexicana durante la Gran
Depresion (Mexico: 1987), p. 161: Joseph Weiss, 'The Benefits of Broader Markets Due
to Feeder Roads and Market News: Northeast Brazil', (PhD Diss., Cornell University,
1971); Letter, Prefeitura Municipal de Garanhuns, Pernambuco, to Inspectoria de
Obras Contra as Seccas, 28 August 1915, M (Maco)-2i;A, Brazilian National Archive.
There appears to have been no empirical comparison of the merits of expanding
Brazil's railroad system versus creating a national highway system. Even today such
comparisons are complex, involving assumptions about pick up and delivery costs,
length of haul, traffic density, energy costs, source of capital, and interest and exchange
rates. See Richard B. Heflebower, ' Characteristics of Transportation Modes', in Gary
Fromme (ed.), Transport Investment and Economic Development (Washington, 1965), pp.
45-6, and Robert T. Brown, 'The "Railroad Decision" in Chile', in ibid., pp. 264-6.
13
Under the Empire provinces and property owners had been responsible for building
and maintaining roads, and hopes for an adequate road system often fell victim to
vague contracts, skimming contractors and the whims of weather. As one account of
the Empire's agricultural experience summarised, 'most highways were mere dirt
paths, poorly designed, that permitted only the passage of mule teams, ox carts, and
horses during the dry season'. Stanley J. Stein, Vassouras: A Brazilian Coffee County,
iSjo-1900 (Cambridge, 1957), pp. 94-110; Eulalia Maria Lahmeyer Lobo, Historia
politico-administrativa da agricultura brasileira, 1808-188) (Brasilia, n.d.), p. 64.
members of the Sao Paulo club, those with rural ties proved most
numerous, with a full 41 % describing themselves as a farmer [lavrador] or
rancher \fa%endeiro\. Prominent founding member Antonio Prado Junior,
later described as a 'great automobilistic excursionist', roused public
interest by motoring throughout Sao Paulo and Parana and organising a
great 'raid' from Sao Paulo to Ribeirao Preto.14
By 1910 the federal government began to conceive of the automobile
as rail's substitute. A 1910 law authorised concessions, similar to those
offered to railroad companies, to 'persons or private enterprises' to
organise 'a system of transportation of passengers or cargo' between two
states or within one state. As with railroads, the government retained
control over rates and required transport at half-fare of all military
personnel, federal employees, colonists, and immigrants and their
baggage, as well as all government seeds and plants. Further, it required
the concessionaire to construct a telegraph line the length of the road
while reserving any payment until completion of all construction.15
As could be expected under the Old Republic's political structure, state
and local governments took the first hesitant steps toward promoting use
of motor vehicles and highways. A 1911 report prepared for the Minas
Gerais state government dismissed autos as the dominion of tourists, but
nevertheless suggested they could link 'railroad stations with the rural
zones in the region', if studies on a case-by-case basis so warranted. That
same year Rio Grande do Sul constructed 74 kilometres of road, including
a ten-kilometre stretch tapping the rich Vale das Antas. By 1913 the
Companhia Mineira de Auto-Viacao Municipal of Uberaba, Minas Gerais,
was building local roads and planning links with Rio Verde and
Morrinhos in the state of Goias. Minas state agricultural secretary Raul
Soares accepted the concept and created a system of concessions designed
to build roads between 'centres of production' and railroad stations
during his 191410 1917 tenure.16 State president Arturo Bernardes termed
highway construction 'an undisguisable duty of the state' because they
would provide 'an easy and cheap outlet for [agricultural] production'.17
14
Business interests were almost equally represented. See Automovel Club de S. Paulo,
Annuario 1921 (N.P., n.d.), pp. 48-7;.
15
Decree 8,324, 27 Oct. 1910, and 'Regulamento...', Cokcfao das Leis de 1910 (Rio de
Janeiro, 1915), vol. 11, no. 2, p. 1,151.
16
TS, 'Estradas de Rodagem', p. 2, 21 June 1911, 1911.06.21, Arquivo Raul Soares
(ARS); Auto-Propulsao, col. i, no. 7 (1915), p. 9; Minas Gerais, Inspectoria de Estradas
de Rodagem, As estradas de rodagem no estado... (Rio de Janeiro, 1929), p. vii.
17
U.S. Consul, Sao Paulo (USC-SP) to U.S. Secretary of State (SS), jo June 1922,
832.154/33, RG 59, USNA. Rio Grande do Sul, Mensagem, 1912, p. 26; Ernesto
Bertarelli, 'As vias comuns de communicacao nos estados agricolas', 0 Progresso, vol.
i, no. 10 (1914), p. 4; Brasii Industrial, vol. 2, no. 15 (1915), pp. 14-15. Only one per
cent of the Old Republic's 113,000 kilometres of roads were paved by 1930. See Arthur
R. Sheerwood, 'Brazilian Federal Highways and the Growth of Selected Urban Areas',
(PhD Diss., New York University, 1967), p. 30.
18
Crandall also hoped that good roads would lead to broad social change in the
Northeast, where 'a few men of great power hold their positions independent of
justice' while the majority lay 'reduced to poverty or to living as bandits'. Brazil,
Inspectoria de Obras Contra as Seccas, Geografia, geologia, supprimento d'agua, transportes
e afudagem nos estados orient/us do norte do Brasil: Ceara, Rio Grande do Norte, Parabyba
[Roderic Crandall], 2nd edn. (1923; rpt.: Rio de Janeiro, 1977), pp. 54, 55-8, 75 and
129.
19
'Obras contra as seccas', RC do 'JC, 1917, p. 163; USC-Pernambuco to SS, 26 July
1919, 832.154/28, USNA. The federal government also had ordered studies of the Rio-
Petropolis road in 1911 but did not assist reconstruction until the late 1920s. See Decree
8571, 22 Feb. 1911, in M-151, Ministerio de Viacao e Obras Piiblicas, Brazilian
20
National Archive. Quoted in Boletim Agricola, 10 (1916), p. 483.
Arquivo lldefonso Simoes Lopes (A1SL). Jose F. Brandao Cavalcanti, 'Em prol do
algodao', A Lavottra, vol. 24 (1920), pp. 269-70.
23
C. P. J. L u c a s , ' T h e G o o d Roads M o v e m e n t in Brazil', Bulletin of the American Chamber
of Commerce, S. Paulo, vol. }, no. 8 (1922), p . 4 ; J o a o Suassuna t o Epitacio Pessoa, 30
Jan. 1925, P-61, AEP; 'As grandes estradas do Nordeste", 0 Automo'vel, 8, no. 101
(1923), pp. 23-5; Raimundo Girao, Histo'ria economics do Ceara (Ceara, 1947), p. 433.
24
Landulpho Alves de Almeida to lldefonso Simoes Lopes, 2; July 1917, pp. 12, 16, 18,
14.12.1j, AISL.
while selling his goods 'without recourse to middlemen'. To make all this
a reality, Alves de Lima recommended adopting several US road-building
techniques.25
The most important channel for US influence upon Brazil's road
programme, though, was the Good Roads Movement. This agglom-
eration of US road-building interests and government officials lobbied
intensely for federal subsidies for road building to remove the burden
from state treasuries. The American Road Builders Association and the
American Automobile Association, both formed in 1902, and the
American Association for Highway Improvement, established in 1910,
orchestrated an enduring campaign to promote federal support for
highway improvement. Partly by its efforts, the US Congress passed a law
in July 1916 providing federal assistance for building rural roads over
which US mail had to be transported. From a base of $5 million for 1917,
federal appropriations mushroomed to $75 million by 1921.26
A similar Good Roads Movement soon took root and grew in Brazil,
sustained by a nascent highway lobby substantially strengthened by US
ties. Both Rio de Janeiro's Automdvel Club Brasileira and Sao Paulo's
Automdvel Club sponsored national highway conferences in 1916, 1917
and 1919 to pressure public officials to achieve their ends. The Rio de
Janeiro conference, in October 1916, featured prominent roles for
President Braz and his Minister of Transportation and Public Works.
Similar gatherings in Sao Paulo in 1917 and in Campinas two years later
sustained the campaign to convince state officials of the advantages of
highway versus rail transportation.27
The Campinas conference also instituted continuous lobbying for
improving Brazilian highways when prominent politicians and members
of the Automdvel Club created the Associacao Permanente de Estradas de
Rodagem (the Permanent Highway Association), or APER. At its head
stood Washington Luiz Antonio Pereira da Fonseca, first secretary of the
25
'Missao Carlos Moreira', Brazil, MAG, Relato'rio, 1918, p. 254; Jose Custodio Alves de
Lima, Conferemia sobre tstradas de rodagem e aproveitamento dos sentemiados (Sao Paulo,
1917), pp. 10-11 and 15-19.
20
[US] Highway Research Board, Ideas & Actions: A History of the Highway Research
Board, 1920-1970 (Washington, n.d.), pp. 2-3; American Highway Improvement
Association, The Official Good Roads Year book of the United States (Washington, 1912),
pp. 8-2j; Gladys Gregory, 'The Development of Good Roads in the United States',
(M.A. thesis, Univ. of Texas at Austin, 1926), pp. 13-18.
27
Automdvel Club do Brasil, Primeira Exposicao de automobilismo, auto-propulsao e estradas
de rodagem (Rio de Janeiro, 192;), p. 5; Jornal do Commercio [Sao Paulo], 1 June 1917,
p. 4, col. 3; U.S. Bureau of Foreign and Domestic Commerce (USBFDC), Motor Roads
in Latin America (Washington, 1925), pp. 129-30; Decree 1707, 13 Sept. 1917,
'Estradas de rodagem', Boletim [Bahia], vol. 1, no. 2 (1917), p. 70; vol. 1, no. 4 (1917),
p. 72.
chamber had more than a passing interest in bettering Sao Paulo's roads.
W. T. Wright, the Chamber's third vice president in 1920 and president in
1922, had years before migrated to Brazil from Maryland, and in 1915 had
established a successful Ford agency in Sao Paulo. An agent for Standard
Oil of Brazil served as one of the Chamber's directors, as did a member
of the Byington Company, Sao Paulo agent for General Motors Trucks,
Cadillac, Buick, Chevrolet and the Firestone Tire and Rubber Company.30
Under Lee's direction the Chamber formed a special committee on
roads at its 31 August 1920 meeting and announced in September that it
had ' taken upon itself to campaign for members' for the APER and hoped
'to interest American capital in improving roads throughout the state'. By
August 1921 every member of the Chamber had also joined the APER,
and the Chamber successfully placed at least one US businessman into the
heart of the road-building programme. L. Romero Samson arrived in
Brazil in 1920 as superintendent of Trading Engineers Incorporated, a
Chicago industrial consulting firm given permission to operate in Brazil
in January 1921. Samson, who claimed to have travelled 30,000 kilometres
within Brazil, soon left the company to use his engineering background
to offer advice on Brazil's road-building programme through the APER's
magazine, A Estrada de Rodagem. The APER then contracted him to
supervise construction of several highways near Sao Paulo.31
The Chamber's influence in the APER gained considerable strength
when the Chamber's general manager and secretary since 1920, Charles M.
Kinsolving, became also secretary of the APER in August 1921.
Kinsolving, son of US Episcopal Bishop in Brazil Lucien Kinsolving, had
returned from World War I service in the Lafayette Escadrille to serve as
the $3,500 per year secretary of the Sao Paulo chamber. He functioned as
secretary for both organisations until August 1922, when he became a
correspondent for a US wire service.32
30
Bulletin of the American Chamber of Commerce, S. Paulo, v o l . i , n o . 1 (1920), p . 1; v o l . 2,
no. ; (1922), p. 36; U.S. Consul, Sao Paulo (USC-SP) to SS, 8 Sept. 1915, pp. 1, 4, 16,
102.1/139 RG 59, USNA; A Evolucao Agrkola, vol. 6, nos. 69-70 (1915), back cover.
Jornaldo Commercio [Sao Paulo], 21 Nov. 21, 1915, p. 9, cols. 2 , 3 ; USC-SP to SS, 1 Sept.
1922, p. 2, 164.12/560, RG 59, USNA. Firestone began to conduct business in its own
right in Brazil in 1923. See Brazil, Ministerio do Trabalho, Industria e Comercio,
Sociedades mercantis autori^adas a functionar no Brasil {1808-11)46) ( R i o d e J a n e i r o , 1947),
p . 134.
31
Bulletin of the American Chamber of Commerce, S. Paulo, v o l . 1, n o . 1 (1920), p . 4 ; v o l . i,
n o . 12 (1921), p . 12; Brazilian—American, v o l . 2, n o . 50 ( O c t . 9, 1920), p . 15 ; L . R o m e r o
S a m s o n , ' O p r o b l e m a da V i a c a o n o B r a s i l ' , A Estrada de Rodagem, v o l . 1, n o . 3 (1921),
p p . 1 3 - 1 4 ; v o l . 1, n o . 4 (1921), p . 2 3 ; See also a d v e r t i s e m e n t , A Estrada de Rodagem,
vol. 1, n o . 2 (1921), inside c o v e r .
32
U S C - S P t o S S , zi J a n . 28, 1920, 6 3 2 . 1 1 1 7 1 / 1 9 , R G 59, U S N A ; Boas Estradas, v o l . 1,
no. 4 (1921), p. 23; Bulletin of the American Chamber of Commerce, S. Paulo, vol. 2, no.
3 (1921), p. 1.
The APER also pressed its case for better roads by hosting official
openings for new stretches of highway. On 1 May 1921 the APER helped
open the Sao Paulo-Campinas highway - under construction since 1916
- with a 327-car caravan headed by a presidential committee and festivities
in Campinas, all designed to inform 'a great number of persons of certain
social position and certain above normal intellectual preparation' of the
benefits of such a road. The APER also sponsored a special trip for the
press in April 1922 along the soon-to-be-opened highway between Sao
Paulo and Itu. Popular novelist and essayist Monteiro Lobato participated
in the trip representing the Revista do Brasil. In October 1923 the
association, now renamed the Associagao de Estradas de Rodagem (AER
— the Highway Association), helped to sponsor the third public highways
conference, a six-day-long gathering of the state's mayors, engineers, and
representatives of railroad companies, touring clubs and other interested
parties. Aside from reviewing highway construction carried out since
1917, the nearly 500 participants committed themselves to gathering
information on road conditions and automobile ownership statewide.
They also witnessed an exhibition of road-building machinery and
automobiles - mainly from the United States - and a demonstration
sponsored by the AER of road-building machinery by representatives of
US firms.33
The close relationship between the AER and US business grew even
stronger when a partner in a road-building firm became the secretary of
the AER. D. L. Derrom was a Canadian engineer and partner of
L. Romero Samson in the firm Derrom-Samson, S.A. The company
became ' most instrumental in the introduction and sale of American road-
building equipment and maintenance machinery' in Sao Paulo at the same
time that Derrom served as the AER's secretary. Derrom lobbied heavily
for highway construction through close ties with Washington Luiz, other
key state and local officials, and 'good roads enthusiasts' nationwide, even
authoring a comprehensive programme for Brazilian road construction
entitled Caminhos para 0 Brasil (Roads for Brazil).34
In its campaign to improve Brazil's roads, the AER received valuable
assistance from Washington Luiz. Not only did he serve as the AER's first
president but, as Sao Paulo's state president between 1920 and 1924, he
33
' A estrada de rodagem de S, Paulo a I t u ' , A Estrada de Rodagem, vol. i, no. 11 (1922),
pp. 3 7 - 8 ; USC-SP to SS, 19 Oct. 1923, pp. 2 - 3 , 832.154/36, R G 59, U S N A ; ' T h i r d
Sao Paulo Highway Conference', Bulletin of the Pan American Union (BPAU), vol.
58 (1924), PP. 182-3.
34
USC-SP to SS, 14 Oct. 1926, 832.154/74, RG 59, USNA; Howard T. Oliver to
Fred I. Kent, 5 Feb. 1926, 033.3211/210 (attachment), RG 59, USNA; USC-SP to SS,
10 Oct. 1927, 832.154/86, RG 59, USNA.
35
' N o t a b l e Automobile Endurance Test in Sao Paulo, Brazil', BPAU, vol. 60 (1926), pp.
I , I 10 a n d 1,117.
36
Pyke Johnson to Francis White, Latin American Div., US Department of State
(USDS), 8 Dec. 1923,515.4C1/-, RG 59, USNA; Walter C. John to SS, 13 March 1924,
515.4C1/27, RG 59, USNA. Dotation Carnegie para la Paz Internacional, Conferencias
internacionales amerkanas, 1889-1936 (Washington, 1938), pp. 214 and 274-5.
40
J. Walter Drake [Assistant Secretary of Commerce] to SS, 14 Jan. 1925, 515.4D1 / 1 ,
R G 59, U S N A ; 'Reunioes semanaes da S R B ' , Kevista da SRB, vol. 6, no. 61 (1925), p.
278; 'Brazilian Federation for Highway Education', BPAU, vol. 61, Primeiro Congresso
Panamericano, p. 25.
41
Drake to SS, 25 Jan. 1925, 515.4D1/1, RG 59, USNA; Quoted in Brazil, Primeiro
Congresso Panamericano, p. ii.
of the 'old idea, still in vogue in Brazil, that highways were a mere
complement to the railroad'. It endorsed the conference's recom-
mendation that 'all the American nations create a central body to
direct... the reconstruction, maintenance, and financing of highways', and
Brazilian delegate Francisco Vieira Boulitreau played a direct role in
implementing the concept in Brazil. In June 1926 he recommended that
the Ministry of Agriculture propose a comprehensive highway law, to
include provisions for a Departamento Nacional de Estradas de Rodagem
(National Highway Department) with broad authority to plan, finance and
direct Brazil's highway construction.42
Aside from lobbying in international fora for automotive interests, US
government officials frequently reported on good roads movements in
Brazil's various regions. From Pernambuco, US consul C. R. Cameron
informed the State Department and the US Bureau of Foreign and
Domestic Commerce in August 1923 that while the automobile owners
'constitute an element naturally favorable to a good roads movement',
state spending on urban improvements, such as sewer and water works,
had depleted public funds. Nevertheless he also enclosed a list of the
principal automobile dealers in the region, 'the most desirable persons
with whom to communicate regarding the good roads movement', and a
year later reported formation of the Associacao de Estradas de Rodagem,
headed by Pernambuco auto enthusiast Carlos de Lima Cavalcanti. The
group launched a combined automobile show and goods roads congress
in January 1926 that failed to gather a large crowd, however. The consul
attributed this to the fact that' purchasers for automobiles are to be found
almost exclusively among the upper, educated classes'.43
The fervour for automobilismo proved stronger in Rio Grande do Sul. A
Porto Alegre dealership forwarded one per cent of revenue from its sales
of Chevrolets to the AER, suggesting a method of financing the AER that
may have been more widespread. The assistant trade commissioner, a US
official, reported creation of a good roads association in Rio Grande do
Sul in 1926. The Associacao Rio Grandense das Estradas de Rodagem
formed around a nucleus of automobile dealers in Porto Alegre, and
similar associations were 'in the course of formation' in Pelotas, Rio
Grande and Sao Angelo.44
42
Brazil, Primeiro Congresso Panamerkano, p . ii; ' E s t r a d a s de R o d a g e m ' , Boletim [ M A G ] ,
15, 2, no. 4 ( 1 9 2 7 ) , p . 429-
43
USC-Pernambuco to SS, 23 A u g . 1923, 832.154/154, R G 59, U S N A ; USC-Pernambuco
to SS, 11 Feb. 1926, 832.154/67, R G 59, U S N A .
44
The check for 4:872$ represented one percent of receipts from the sale of 50
Chevrolets. General Motors, vol. i, no. 6 (1926), p. 19; Richard C. Long 'Highways in
Rio Grande do Sul', quoted in Brazilian Business, vol. 7, no. 6 (1927), p. 9.
cars, the only kind which can be used in country of this nature'. In the
Northeast Ford trucks were converted into buses, and one sertanejo in
Acari, Rio Grande do Norte, even linked the engine of his Ford truck to
a cotton gin and drove from farm to farm ginning cotton for his clients.
A Jesuit who travelled frequently into Goias praised the car and its maker:
' The great North American industrialist, inventor of a car as simple as it
is strong, deserves to be considered one of the greatest benefactors of the
backlands of Goyaz.'46
Impressed by the wartime demand for US-made autos, Ford's
executives soon resolved to open an assembly plant in Brazil. In April
1917 they asked the Brazilian consul in Buffalo to furnish them with laws
on road conditions and maintenance to aid the decision, and on 24 April
1919, approved a capital expenditure of $25,000 to establish an assembly
plant in Sao Paulo. Two company officials experienced in selling Fords in
Argentina hurried to Sao Paulo to arrange for assembling the vehicles'
imported components (only jute to stuff seats would originate in Brazil)
in a refurbished skating rink. Within a year the company began to
construct its own building on Rua Solon, a few metres from where
W. T. Wright had established his successful agency during the war.47
Output at the plant reflected both the increasing popularity of the
vehicles and the soundness of the venture. Production shot up from 2,447
in 1919 to 24,500 in 1925, and earnings totalled $4 million for 1925-6.
Fords became the dominant vehicles in many Brazilian towns. Of the 5 8
automobiles owned in 1921 by residents of Sorocabana, Sao Paulo state's
third largest city, three were Fiats, two were Overlands, one each was a
Hupmobile, Benz, Saurer, Buick, Chevrolet, Adler and Scat. The
46
Brazil, Directoria de Estati'stica Commercial, Commercio Exterior do Brasi/: Importacao,
Exportacao ipij-iy/X (Rio de Janeiro, 1921), vol. t, p. 120; Lillian Elwyn Elliott, Brazil
Today and Tomorrow (New York, 1917), pp. 127-8. Diplomats, however, preferred more
expensive models. In a confidential telegram to the Brazilian Charge in Washington,
Foreign Minister da Gama ordered a draw upon a London account of 56,219.23 to
purchase a Phiama auto for da Gama. Embassy of Brazil, Washington (EBW) to
Ministerio de Relacoes Exteriores (MRE), 4 March 1919, M-232, 2, u , Arquivo
Historico d o Itamarati (AHI). Arno S. Pearse, Brazilian Cotton (Manchester, 1923), p.
141; Inspectoria Federal de Obras Contra as Seccas, Segundo Distrito, T S ,
'Transcripcao de trechos de Relatorios ', P - 6 i , Arquivo Epitacio Pessoa ( A E P ) ;
Camillo Torrend, 'Excursao a Goyaz', Boletim [MAG], vol. 15, no. 6 (1926), p. 770.
47
Noticias Ford, vol. 8, n o . 2 (1979), p . 3 ; Mira Wilkins a n d Frank E . Hill, American
Business Abroad: Ford on Six Continents (Detroit, 1964), p p . 9 3 - 4 . F o r d ' s plant was n o t
the first auto assembly plant in Brazil. In 1904 Luiz and Fortunato Grassi organised a
company that in 1907 assembled the first Fiat to operate in Brazil. The same company
in the 1920s sold both Ford and General Motors truck chasses for their products. See
Jose Almeida, A implantacao da industria automobilistica no Brasil (Rio de Janeiro, 1972),
pp. 4-5, 14; Benedicto Heloiz Nascimento, Formacao da industria automobilistica
brasileira: politico de desenvolvimento industrial em uma economia dependente (Sao Paulo, 1976),
p. 14. 'A expansao do Ford no Brasil', Automobilisma, vol. 1, no. 1 (1926), p. 20.
of cars to population. Even with Alabama's ratio, Sao Paulo would have had 400,000
autos, instead of less than 39,000. See Automobilismo, vol. 1, no. t (1926), p. 26.
51
Minas Gerais, Estradas de Rodagem, p. 4 ; USC-Bahia to SS, 8 Oct. 1924, 832.513/-, R G
59, U S N A ; Bahia, Mensagem, 1926, p. 245.
52
'A caravana Ford-Fordson...', 0 Automobilismo, vol. 1, no. 3 (1926), pp. 36-7; USC-
SP to SS, 30 Sept. 1926, 832.154/73, RG 59, USNA; ' O grande circo Chevrolet',
General Motors Brasileira, vol. 5, no. 52 (1930), pp. 8-9.
63
B. F. O ' T o o l e [Latin American Div., U S B F D C ] to N . Y. District Office, U S B F D C , 10
Oct. 1925, Box 2232, R G 151, U S N A ; T S , General Motors d o Brasil, untitled
scrapbook, n.d., pt. 1, p . i, A G M B .
64
General Motors, scrapbook, p p . 4, 6; T S , 'Office Bulletin (26 N o v . 1926)', scrapbook,
A G M B . Ford retained a dominant market share, however, in 1950: 5 4 . 9 % versus
General M o t o r ' s 17.1 %. Wilkins and Hill, American Business, p. 202.
21 LAS 24
68
New York Times (NYT), 19 April 1927, p. 9, col. 1.
60
Antonio F. P. Almeida de Wright, Desafio americano a preponderancia britanica no Brasil,
1808-18jo (Sao Paulo, 1978); Norman Strauss, 'Rise of American Growth in Brazil:
Decade of the 1870V, Americas, vol. 32 (1976), pp. 437-44. Herbert H. Smith, Brazil:
The Amazons and the Coast (New York, 1879), p. 492; Graham, Britain and the Onset, pp.
298-318; E. Bradford Burns, The Unwritten Alliance: Rio Branco and Brazilian-American
Relations (New York, 1968).
21-2
British stopping of the German merchant ship Santa Catarina shortly after
the war's outbreak. The ship carried machinery for Continental Products'
new meat packing plant and several other US businesses in Brazil. After
being detained by the British cruiser Glasgow, a 'fire originating through
spontaneous combustion of her bunker coal' destroyed the ship's cargo.
While the Ambassador judged the destruction unintentional, State
Department officials did later question British motives for protesting US
sales to Brazilian firms on the trade restriction ('black') list, hinting that
such moves were merely a disguised effort to weaken the US commercial
presence.61
US officials also carefully tracked British wartime commercial activities
in Brazil. The US naval attache cautioned in late 1917 that commercial
rivalry was imperiling the war effort, and in April 1918 a US intelligence
agent warned that the United States was 'fast losing ground', threatened
by ' the loss of all this good trade, either to England - who is frankly
going after it — or to Germany who still has many friends here'. 62 The
visit of a British commercial delegation the following month caused US
Ambassador Morgan to caution that 'our commercial and political
interests were threatened and that the policy of peaceful penetrations in
the southern Hemisphere... might find new barriers placed in its way'. As
UPI correspondent Roy Howard reported cryptically: there was an
' undisguised animosity British American commercial interests...
untempered unmodified by common purpose French battlefield'.63
The competition only intensified after the war. The US consul in Porto
Alegre charged in June 1919 that the British firm Wilson, Sons and
Company, plying freight between Rio Grande and Porto Alegre,
discriminated against US firms. US products ordered by W. R. Grace
often lay in a warehouse unsold because Wilson delayed their delivery
while their own goods were being sold. All this was just more evidence,
the consul remarked, that 'British distributors are quite alarmed at our
progress in the market, and they never miss an opportunity to criticize our
goods and methods'. 64 The United States scored an important gain in
possible commercial benefits at British expense when Brazil accepted a US
61
Emily S. Rosenberg, 'Anglo-American Economic Rivalry in Brazil During World War
I', Diplomatic History, vol. 2, no. 2 (1978), p. 133; John I. Merrill [Central and South
American Telegraph Company] to EBW, 2 April 1917, M-234, 2, 7, AHI; Manoel
Coelho Rodrigues to MRE, 16 July 1919, M-234, 2, 12, AHI; USE-RJ to SS, 21 Oct.
1914, 300.115/134}, RG 59, USNA; USE-RJ to SS, 23 Oct. 1916 and Memorandum,
Solicitor, USDS, 16 Nov. 1916, both in RG 59, 332.114846, USNA.
62
TS, 'General Situation in Brazil', 9 Dec. 1917, ONI Files, WA-7, Brazil, USNA;
Confidential encl. to USE-RJ to SS, 18 April 1918, 632.1116/1, RG 59, USNA.
63
USE-RJ to SS, 16 May 1918, 033.4132/5, RG 59, USNA; Roy W. Howard, Telegram
to United Press International (UPI), New York, 14 May 1918, L-46, P-i, N-76, AEP.
64
USC-PA to SS, 19 June 1919, 800.8830/205, RG 59, USNA.
naval mission in 1922. Since Brazil intended to improve its navy, the
US mission portended possible major naval contracts for US shipyards
or construction firms. Although Brazil did explore construction of an
arsenal, the naval mission had little commercial impact — despite British
fears and US aspirations.65
The looming American economic challenge soon provoked an official
response from London. US imports dominated the Brazilian markets
through 1921 and, although British imports regained prominence in 1922
and 1923, Brazilians began to turn more often to US financiers for loans.
In 1923 the British government sent out a high-level financial commission
headed by Edwin Montagu, Parliamentary secretary to the Chancellor of
the Exchequer, Sir Charles Addis, afinancialexpert and 'eminent banker',
and Lord Lovat, director of the Sudan Plantation Syndicate and a cotton
authority. Seeking the 'opportunities for and conditions necessary to
further cooperation between British and Brazilian capital', the mission
embarked upon two months of meetings with Brazilian government
ministers and department heads, with extensive tours of Minas Gerais and
Sao Paulo. The commission's head hoped to nuture 'old-established and
friendly Anglo-Brazilian commercial relations' and stressed the willing-
ness of British investors to ' provide further capital if assured that such
capital would be welcome'.66
The commission's recommendations pointed out that capital should be
welcomed, especially in the transportation sector. The commission felt
strongly that' when fresh capital is attracted to the country it will be most
usefully applied to transportation development'. Along with a more
orderly budget process and continuing ' prudent government', improving
transportation was an absolute necessity for Brazil. All aspects of Brazil's
development - ' the production of crops, the mining of materials, the
distribution of necessary population and the investment of capital' —
depended upon 'adequate railway facilities', in the commission's opinion.
Since railways lay 'at the root of the whole future prosperity of Brazil',
their extension and improvement was 'a matter the urgency of which
cannot be overemphasized', the report asserted.67
06
Joseph Smith, 'American Diplomacy and the Naval Mission to Brazil', Inter-American
Economic Affairs, vol. 35, no. 1 (1981), pp. 85-6; Stanley E. Hilton, 'The Armed Forces
and Industrialists in Brazil: the Drive for Military Autonomy (1889-1954)', Hispanic
American Historical Review, vol. 62 (1982), p. 640.
66
USC-London, Memorandum, 28 Nov. 1923, 033.4132/13, RG 59, USNA; The Times,
28 Nov. 1923; Brazil, Directoria de Estatistica Commercial, Commercio Exterior do
Brasil: Importacao, Exportacao, Movimento Maritimo 19/9-1923 (Rio de Janeiro, 1928), pp.
23-5; The Times, 22 March 1924, p. 22, col. 1; 2 Feb. 1924, p. 12, col. 3.
67
The Times, 22 March 1924, p. 22, col. 1; British Financial Commission, 'Report
Submitted to His Excellency the President of the United States of Brazil...', 23 Feb.
1924, p. 27, 033.4132/40, RG 59, USNA.
68
British Financial Commission, ' R e p o r t ' , pp. 27-8 a n d 33.
69
USE-RJ to SS, 5 March 1924, 033.4132/30, RG 59, USNA; USE-RJ to SS, 11 Oct.
1924, 033.4132/39, RG 59, USNA and end., Jornai do Brasil, 11 Oct. 1924; 0 Pai%, 9
Oct. 1924.
forced to share the streets with nearly 800 Fords and impressive numbers
of Studebakers, Hudsons, Chevrolets, and Dodges and various German
and French models. The Chamber blamed the disappointing showing on
the shortsightedness of British auto makers and upon the instalment
credit extended to buyers of US cars, a system which allowed small
investors to pool resources to finance taxis and taxidrivers to purchase
their vehicles from their receipts. Another observer credited the more
frequent sailings of ships from the United States to Brazil than from
Britain, claiming that 'Americans control nearly 90 percent' of the
automobile trade partly because frequent ships relieved local dealers ' from
the burden of carrying a large stock of machines on hand'.70
US predominance over Britain and other European competitors
stimulated continual expansion of US auto assembly activities. Ford's
success with its Sao Paulo assembly plant prompted opening in 1925 of
similar but smaller operations in Rio de Janeiro, Porto Alegre and Recife,
and plans for a larger factory in the Mooca district of Sao Paulo. By 1928
Ford had 700 agencies and over 2,000 authorised garages throughout
Brazil to sell and repair its products, and the Sao Paulo line produced
2,000 machines per month. General Motors, meanwhile, assembled nearly
34,000 vehicles at its Sao Paulo plant by 1927 and began planning an
expanded plant in Sao Caetano do Sul, about eight miles from Sao Paulo.
The company boasted a nationwide network of 400 sales outlets
employing 1,500 persons, and Brazil became the third largest importer of
US trucks in 1925, after Australia and Italy. By 1928, US autos constituted
99% of all Brazilian auto imports.71
The constantly expanding auto industry attracted many other US firms
to Brazil to supply parts, and financing and maintenance for the fledgling
industry. The Goodyear Tire and Rubber Company, United States
Rubber Company, and General Tire and Rubber Company all opened
businesses in Brazil in the 1920s to satisfy the burgeoning demand for
automobile tyres. The Overseas Motor Export Corporation began to offer
70
'Roads and Cars in Brazil', Monthly Bulletin of the British Chamber of Commerce in Brazil,
vol. 5, no. ; 1 (1923), pp. 90 and 96; 'Why we need American ships', Bulletin of the
American Chamber of Commerce, S. Paulo, vol. 4, no. 5 (1923), p. 5. In 1922 'vehicles for
hire' was the most important category of automobiles registered in Rio de Janeiro. Of
4,645 autos, more than 44% (2,047) were for hire while 40% (1,847) were 'private
cars'. USACG to SS, 31 July 1922, 832.797/2, RG 59, USNA.
" 'Na Rua Solon...', Noticias Ford, vol. 8, no. 2 (1979), p. 4; ' O commercio de
automoveis em Sao Paulo', 0 Automobilismo, vol. 3, no. 24 (1928), pp. 27-9; TS,
General Motors do Brasil, Production Control, ' Units Produced Cumulative Through
194;', 1959, AGMB; 'A filial da GMB na Bahia', General Motors Brasileira, vol. 3, no.
26 (1928), p. 7; 0 Automobilismo, vol. 1, no. 5 (1926), p. 45; USBFDC, The Automotive
Market in Brazil (Washington, 1930), p. 9; USBFDC, Commerce Yearbook ipjo
(Washington, 1930), vol. n, pp. 161-2.
equipment for painting cars and other products to repair General Motors
vehicles. The Johns-Mansville Company opened a branch in 1923 and
began to supply asphalt products, clutches and lining for brakes. Agents
for US firms associated with road-building began to criss-cross Brazil,
offering their wares, often with a letter of introduction from the US
ambassador.72
A comparison of indicators of growth between automotive-related and
the rail-related sectors highlights the dynamic nature of the former. While
there appears to be no comparison available of new investment in each
area, statistics on importation of equipment employed with each sector
lends further support for the more dynamic nature of automobile and
truck transportation. The number of automobiles and trucks imported
into Brazil between 1923 and 1927 grew from 7 to 13.5 times faster than
the increase in railroad rolling stock during the same period (see Fig. z).73
Such figures also mirror trends in the relative vitality of US and British
4.52
3j?4
- 3.
/
•
•
1.8S''
1.26 1.23
„--•' 1.12 r )6
1 1
72
' O commercio de automoveis em Sao Paulo', 0 Automobilismo, vol. 2, no. 24 (1928),
p. 34; 'Caravana Ford-Fordson', 0 Automobilismo, vol. 1, no. 3 (1926), pp. 36-7; Brazil,
Ministerio do Trabalho, Industria e Commercio, Sociedades mercantis autori^adas a
funcionar no Brasil (1808-1946) (Rio de Janeiro, 1947), pp. 131-42; Brazilian American,
vol. 3, no. 70 (1921), p. 37; Ambassador Morgan to Raul Soares, 8 March 1923, 23-30-
08/1, ARS. Sales of gasoline by Standard Oil of New Jersey also probably increased
significantly during this period. Established in Brazil through a subsidiary in 1896, by
the war years annual profits from the company's Brazilian operations consistently
topped $1 million. George S. Gibb and Evelyn H. Knowlton, History of Standard Oil
Company (New Jersey): The Resurgent Years, 1911-1927 (New York, 1955), pp. 182 and
197.
73
Calculated from figures compiled from consular reports by USBFDC. See USBFDC,
The Automotive Market in Brazil (Washington, 1930), p. 9; USBFDC, Commerce Yearbook
'93° (Washington, 1930), vol. 11, p. 76.
export sectors during the period. Between 1913 and 1924 Britain's share
of world trade fell on average 3.5% annually, precisely when US success
in chemicals, machinery and transport equipment expanded the US impact
on world markets.74
Beyond establishing US businesses firmly within the Brazilian economy,
the automobile touched off a burst of enthusiasm among those who saw
it as the ultimate expression of a modern era. Endorsed by authors such
as Monteiro Lobato, a wave of admiration for Henry Ford swelled within
Brazilian literary ranks. Monteiro Lobato translated Henry Ford's My Life
and Work and Today and Tomorrow for publication in a Rio de Janeiro
newspaper and praised Ford as 'the foremost example of clearness of
vision in our day and generation'. In Monteiro Lobato's opinion, Ford's
life story was the 'Messianic Gospel of the Future', so important that 'for
Brazil there is no literature or study more fruitful than Henry Ford's
book'. The auto itself became 'a symbol of progress, a representation of
the mechanical world' of Mario de Andrade and the other disciples of the
Modernist movement.75
Such enchantment with the automobile represented the culmination of
forces that by the end of the 1920s gave motor vehicles a permanent and
officially-sanctioned role within Brazil's economic system. As railroads
became less attractive, federal and state governments gradually became
more involved in the building of roads. Subsidies continued to stimulate
construction of new roads, as between 1918 and 1924 over 3,700
kilometres of the new highway went into service. By 1924 road building
in Minas Gerais began to move from 'the theoretical state to that of
practical results'. The state organised a bureau of roads and highways and
began planning to extend existing roads in the %pna da matta and near Belo
Horizonte, as well as between the state capital and Rio de Janeiro. In 1926
Sao Paulo state created a Directoria de Estradas de Rodagem (Highway
Office) and authorised borrowing of up to 100,000:000$ to construct,
conserve or improve state roads. In January 1927 the federal government
approved a tax on all automobiles, trucks, buses, motorcycles, and
accessories to finance highway construction and stipulated inclusion of
similar provisions for road funding in all future budgets. The following
74
R. C. O. Mathews, C. H. Feinstein, and J. C. Odling-Smee, British Economic Growth
(Stanford, 1982), p. 467; James Foreman-Peck, A History of the World Economy:
International Relations Since ipjo (Totowa, N . J . : 1983), p. 221. Rostow, The World
Economy, pp. 70-4.
76
[Jose Bento] Monteiro Lobato, How Henry Ford is Regarded in Brazil (Rio de Janeiro,
1926), pp. 4 and 8. John Nist, The Modernist Movement in Brazil: A Literary Study
(Austin, 1967), p. 20. Monteiro Lobato represented the Brazilian expression of
'Fordismus', an international study of Ford's ideas and techniques. See Wilkins and
Hill, American Business, pp. 151-2.
year the federal government expanded funds for road building con-
siderably, even authorising financing of federal roads through bond
sales.76
The strongest symbol of the arrival of Brazil's new era was completion
of the Rio de Janeiro—Sao Paulo highway. The highway had been the
favourite project of Washington Luiz while governor of Sao Paulo state
from 1920 to 1924. He had used state funds to rebuild a tortuous cart road
known as the Estrada Real that was unsuitable for heavy cargo, usually
moved by sea and rail to Sao Paulo through the port of Santos.
Washington Luiz ordered the building of a modern highway within his
state toward Rio de Janeiro, and by late 1926 the new road reached the
border with Rio de Janeiro. The project soon began to reflect the visions
of engineer D. L. Derrom, who foresaw a 'great concrete artery... with its
hotel and summer resort at Lages...with road houses, garages, and red
gasoline pumps sprinkled along the route', including 'a fine overnight
hotel at Bananal for those who like to travel slowly'. By the time the road
opened on 5 May 1928 over 10,000 workmen had laboured on what was
called 'one of the first sections of the great Brazilian highway system'.
Within two months the new road became the stage for more high drama
orchestrated by the AER to advance its campaign in favour of autos over
railroads. Two AER members race a US-made Willys-Overland
' Whippet' between the two cities in 13 hours and 3 7 minutes and argued
that the cost of 34:842$ for gasoline, oil and depreciation offered a
' flagrant difference' favouring the automobile when compared with all the
expenses associated with the same trip on the Central do Brasil.77
Conclusion
In less than two decades Brazil began the transition from the era of
railroads to the era of the automobile, shifting its economic reference
point from Great Britain to the United States in the process. The
difficulties facing the railroads, the recommendations of US technicians
contracted to serve in the struggle against the drought in Northeastern
Brazil, and the need to transport greater quantities of new and old
products carried Brazil to the edge of the automotive age. Driven by the
need to find an economical way of meeting expanding demands for
transportation and by the power and appeal of US lobbying efforts,
Brazil's elite accepted a high level of US presence within this vital sector
of its economy. Concurrently, Brazilian interest in supporting investment
76
' A s estradas de r o d a g e m ' , Boletim [ M A G ] , vol. 14, part 1, no. 3 (1925), p- 388; Boletim
[ M A G ] , vol. 16, part 1, no. 1 (1927), pp. 31 and 35; U.S. Consul General, Rio d e
Janeiro ( U S A C G - R J ) t o SS, 7 N o v . 1928, R G 59, 832.51/531, U S N A .
77
' O trafego r o d o v i a r i o ' , Boletim [ M A G ] , vol. 17, part 2, n o . 1 (1928), p. 65.