And of the works of the authors themselves

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Luiz Felipe Bruzzi Curi_Danilo Barolo Martins de Lima

problem derived from international markets that failed 

to absorb Brazilian exports. This way, the interests of 

foreign capital invested in Brazil were not to be taken 

as an excuse for the imposition of directives concerning 

the negotiation of trade agreements. To sum up, in his 

words: “Our problem results from the impossibility of 

transferring abroad any remuneration or income, given 

the form which national economic evolution took.” 

(

SIMONSEN

, 1935, pp. 17-18).

The solution for this problem did not consist 

for Simonsen in defaulting on foreign debt. Brazil 

had defaulted on its foreign debt in 1931, when the 

global economic crisis affected coffee exports and 

the new government of President Vargas decided for  

nonpayment. In 1934 Oswaldo Aranha, then Finance 

Minister, negotiated a scheme with international 

creditors, envisaging the partial resumption of payments: 

Simonsen was overtly in favor of this amortization 

system. Moreover, he proposed in the 1935 speech a 

strategy to tackle the Brazilian difficulties to remunerate 

foreign investment. It involved the creation of a “National 

Institute of Exportation”, which would organize payments 

to international creditors, based on the magnitude 

of surpluses in the balance of trade. The idea was to 

guarantee the continuous generation of foreign currency 

to reimburse commitments, even though the amount 

generated could oscillate.

The general intention was to keep the benefits to 

Brazilian economic development derived from foreign 

capital, by means of an institute associated to the 

Ministries of Agriculture and of Labor, which would 

regulate foreign payments. In this scheme, imports 

would flow into the country only if the corresponding 

amount of foreign currency were previously available. A 

ranking of priorities for imports should be introduced, 

the first items being: inputs for industry, wheat, fuels, 

pharmaceuticals and “the elements necessary for our 

economic machinery” (

SIMONSEN

, 1935, p. 22).Policies 

envisaging the increase in exports should also be adopted, 

but not the approval of a Free Trade Agreement such as 

the one in question: the measures should be directed to 

the organization of production and its protection.

Agriculture and industry were seen as 

complementary: “having put our agricultural production 

on a rational basis, we should, so far as concerns industry, 

follow a frankly protective policy” (

SIMONSEN

, 1935,  

p. 33). The justification for protectionism was given by  

the structural necessity of industrialization, which, 

according to Simonsen, characterized the Brazilian 

economy at the moment.

Exchange had to fall, independently of 

errors of policy, because the supplying of the 

necessities of a people whose civilization was 

progressing demanded commodities which 

our exportation of agricultural products could 

not pay for. The lack of exchange equilibrium 

gave impulse to the industrialization of the 

country, which could have been anticipated 

by the adoption of an open and frankly 

protective commercial policy, such as had the 

United States and Germany and such also had 

Great Britain, when she needed such a policy 

for the consolidation of her economic position. 

(SIMONSEN, 

1935

, p. 

28

-

29

)

The general aim was to tackle problems related to the 

international flows of commodities and goods not 

necessarily by means of liberalization, but through 

regulations framed by the State. If the free market 

prevailed with no hindrance, Brazil would, according 

---

Roberto Simonsen and the Brazil-U.S. Trade Agreement of 1935 

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492

to Simonsen, remain economically vulnerable, subject 

to persistent exchange rate devaluations, derived from 

the impossibility to domestically satisfy the demands 

created by the expansion of civilization. The main affinity 

of the speech with Rodbertus ideas is in this topic: the 

State is an important entity, whose role is to regulate the 

economic system. 

For Simonsen, however, the main role of the State 

was not to redistribute wealth, which points to the 

selective character of his appropriation of Rodbertus, 

associated with the legitimization of a protectionist 

argument. Basically Simonsen was no complete adherent 

of Rodbertus’ theory, but the reference to his idea that 

the State should play an important role in the regulation 

of the economy certainly was functional in a political 

dispute in which Simonsen was challenging the liberal 

stance to trade and economic policymaking in general.

In the final part of his speech Simonsen provided 

a historical description of trade policies carried out by 

France, England and the United States, so as to show that 

these countries adopted protectionist measures whenever 

it was necessary to defend their national economies. In 

the contemporary international economic scenario, the 

critical 1930s, marked by a severe deceleration of global 

economic growth and by the dismantlement of the 

monetary system based on the gold standard, many 

countries were actually carrying out a protectionist 

exchange rate policy: the so-called competitive or 

“beggar-thy-neighbor” devaluations.

18

The focus of these historical descriptions was 

the American case, which for Simonsen represented 

a clear example of policies adopted in order to defend 

national interests. He saw nothing wrong with American 

policymaking: ultimately the national point of view 

should prevail over the cosmopolitan one, as implied by 

Adolph Wagner. The misguided strategy was the Brazilian 

one, which in contrast to the North American was 

based on the free trade principle, to the disadvantage of 

national industry.

At the beginning of the speech, Simonsen had 

praised Wagner’s idea of national economy as the best 

approach to economics available and presented in the 

course of the talk arguments in conformity with this 

reference. Even though Simonsen did not explicitly  

quote theoretical passages by Wagner, which by the 

way would have sounded awkward in a parliamentary 

address, he clearly challenged the notion that free trade is 

necessarily beneficial to all nations in the globe. Likewise, 

when Wagner defined the concept of national economy 

in his book, he presented important objections to the  

free trade principle.

Now concentrating on the Brazilian case, Simonsen 

revisited the history of the tariff policies adopted by 

the country. He mentioned the agreements of 1808 and 

1810

, when the Portuguese court fled to Brazil, breaking 

the colonial pact and opening the Brazilian economy to 

international trade, particularly to English products; the 

Alves Branco tariff of 1844, considered to be relatively 

protective; and the gold tariff (1900) which established 

that duties on imports should be paid in specie. 

According to him, in spite of some mostly unintentional 

protection resulting from tariffs adopted for fiscal 

reasons, Brazil had never implemented a coherent policy, 

rationally aimed at protecting the national economy.

Having cancelled the first commercial 

treaties, we did not know how to maintain 

a convenient and continuous orientation 

in tariff matters. In the political agitations 

in which we lived, subject to the influences 

---