The Great Depression and
the Americas (1929 – 39)
Objective 3.5: Consider the causes and effects of the
Depression and how effectively they were dealt with in the
countries of Latin America, focusing on Argentina and Brazil
US trade with Latin American as a percentage of total Latin
American trade
Countries of South America
1913
1918
1927
Imports from USA
16.2
25.9
26.8
Exports to USA
16.8
54.8
25.2
Countries of Central America 1913
1918
1927
Imports from USA
53.2
75.0
62.9
Exports to USA
71.5
73.4
58.4
*WHAT CONCLUSIONS CAN YOU DRAW FROM THE STATISTICS?*
Warm-Up: Statistical Analysis
Cartoon Analysis:
American Foreign
Policy in the 19th
and early 20th
Century
Monroe Doctrine
(1823)
Cartoon Analysis:
American Foreign
Policy in the 19th
and early 20th
Century
Roosevelt
Corollary (1904)
AKA “Big Stick
Diplomacy”
Cartoon Analysis:
American Foreign
Policy in the 19th
and early 20th
Century
Dollar Diplomacy
(1909)
Cuba
Philippines
Cartoon Analysis:
American Foreign
Policy in the 19th
and early 20th
Century
“Good Neighbor”
Policy(1933)
Puerto
Rico

Professor Walter LaFeber argues that the
United States developed a foreign policy
which deliberately made Latin American /
Caribbean nations its economic
dependents from the early 19th Century
◦ Take notes to track his argument
◦ Decide whether what points are logical and
which do not seem fully supported
Essay Analysis
Big Question: How healthy were the
economies of Latin American countries
during the 1920s?

Relied heavily on
the export of raw
materials
◦ Dependent on the
production and sale
of one product or
monoculture—i.e.
coffee in Brazil
Economic developments in Latin
America

Relied heavily on
the USA and
Western European
countries,
particularly Britain,
for foreign trade
and investment
◦ Neo-Colonialism?
Economic developments in Latin
America
Geographical factors made it difficult
for Latin American countries to trade
significantly with one another
 Maldistribution of income—can’t afford
manufactured goods
 Competition with already industrialized
nations to produce industrialized goods

Reasons for dependence on
foreign trade and investment
As a result of World War I, Western
European countries became less
significant trading partners
 US investment in Latin America grew from
$1.5 billion in 1924 to $3 billions by 1929
 “Dollar Diplomacy”—interested in
investment rather than trade

Growth of US Investment
Political
developments
US Supported
Dictatorships
Venezuela,
Paraguay, etc.
$
US Supported
Democracies
Argentina,
Brazil, etc.
$
Communism?
$

Various factors meant that the Great
Depression would hit the countries of Latin
America hard as they were not well equipped
to deal with it…
◦ Governments (including US-set democracies) were
partial and tenuous
◦ International demand for the primary products
supplied by Latin America was largely in decline
◦ Growth in foreign ownership and investment meant
that profits from trade went outside the country
The onset of the Depression in
Latin America

What do you think of when you hear/see
the following word?
◦ GLOBALIZATION
 Why do you think that globalization could be
controversial?
Warm-Up: Term Definition
Read the question given to you
 Answer the question given to you

◦ You may use the “cheat sheet” if necessary to
help form your response

Share your response (should only be
sentence or two) with the class
“Ten Basic Questions About
Globalization"
“Ten Basic Questions About
Globalization"
ISI Defined

Import Substitution Industrialization
◦ Trade and economic policy based on the premise that a
country should attempt to reduce its foreign dependency
through the local production of industrialized products
ISI in Latin America

In Latin American countries where ISI was most
successful, it was accompanied by changes in
government
◦ Old neocolonial governments were replaced by semidemocratic governments.

Banks, utilities, and certain foreign-owned
companies were nationalized or transferred
ownership to local businesspeople.

The two case studies
provided, focus on two
large countries that
were strongly affected
by the Depression—not
all countries were hit as
hard, nor were all
countries so large

Questions to
consider…
◦ What type of government
did this country have in
place?
◦ Was its economy
dependent on one crop or
diversified?
◦ Did it have any industry?
◦ Who were its main trading
partners?
◦ What sort of class structure
did it have?
◦ How hard was it hit by the
Depression?
◦ How did it get out of the
Depression?
Case Study: Brazil and Argentina
$$$
Concentration on
primary products for
exports
Dominance of coffee
Lack of industrial
development
Amount of national
debt
Brazil in the 1920s:
Economic problems
Dominated by
populous provinces
of Sao Paulo and
Minas Gerais
Growth of military
& urban middle
class involvement
= modernization
Low participation in
elections
Growing opposition
to political
dominance by large
landowners
Brazil in the 1920s:
Political problems
Catholic church
concerned with
social problems
Vargas in Brazil

Getúlio Vargas
◦ President/Dictator from
1930-45 and 1951-54
◦ Established “Estado
Novo”
 ruled by decree
 set up a special police
force
 abolished personal
freedoms
 introduced strict press
censorship
“The Estado Novo does
not recognize the rights
of the individual against
the collective.
Individuals do not have
rights; they have duties.
Rights belong to the
collective!”
Diversification
Avoiding overreliance on
singular export of
coffee
Five-Year Plans
Industrial Growth
Growth in oil and
steel production
Brazil in the 1930s—
Fighting the Depression
1860-1930—strongest economy in South
America (annual growth averaged 6.3%)
 Absorbed 6 million immigrants from 18701914 (mainly from Italy and Spain)

Argentina up to the 1920s:
Economic developments

1916—peaceful transition to full
democracy with the election of Radical
Party leader Hipólito Yrigoyen
◦ attempts to win support of middle classes /
urban working classes
◦ reforms education system
Argentina up to the 1920s:
Political developments

Tragic Week (January 1919)
Budget deficit
extremely
high
Yrigoyen cut
public
spending
Supporters
lost job
Argentina in the 1930s—
Immediate Effects of Great
Depression
Concordancia: 1931 military coup—
overthrows Yrigoyen
National
Democrats,
Independent
Socialists,
Nationalists
General
Agustín Justo
president
from 1932
Argentina in the 1930s—
“Infamous Decade”
Growth of
nationalism
Diversification
Industrial
Growth
Increasing
Trade
Avoiding overreliance on
singular export
Growth textile
production
Roca-Runciman
Agreements w/
Britain (1932)
Argentina in the 1930s—
Fighting the Depression
Eden-Malbrán
Treaty w/
Britain (1936)

Using the summary diagram, write a
response to the following prompt…
Compare and contrast the economic
policies undertaken by Argentina and Brazil
during the Depression
Quickwrite