BRAZIL in 1939 was in an early stage of development from a colonial agricultural economy to an industrial one.1 Her natural resources were adapted to modern technology, for she possessed rich bauxite and magnesium ores and great possibilities for the development of hydroelectric power in the region which already contained most of her population and industrial activity. Nevertheless, throughout most of her history she had been primarily dependent, except for foodstuffs, upon foreign trade. Prosperity had been derived from a series of export booms in tropical agricultural commodities--sugar, tobacco, cotton, rubber, and coffee. Most manufactured durable goods, industrial equipment, metallic raw materials, and even fuel had been imported. A plantation system, operated by slave labor until 1888, had delayed the development of internal trade, of a domestic market, of a mobile working class, and of an entrepreneurial group.
With population and economic life concentrated upon the seacoast, Brazil's economic life in 1939 was still regional rather than national. (In this connection Chart 8 is of some interest.) Lines of traffic ran inland from the ports toward nowhere, some without interconnection and others joined only to other transportation routes____________________