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Uruguay - HISTORY
<"2.htm#PRE-COLUMBIAN">FROM PRE-COLUMBIAN TIMES TO THE CONQUEST
<"3.htm">THE STRUGGLE FOR INDEPENDENCE, 1811-30
Artigas's Revolution, 1811-20
<"4.htm">From Insurrection to State Organization, 1820-30
<"5.htm">BEGINNINGS OF INDEPENDENT LIFE, 1830-52
The First Presidents, 1830-38
<"6.htm">The Great War, 1843-52
<"7.htm">THE STRUGGLE FOR SURVIVAL, 1852-75
Intervention by Neighboring Countries
<"8.htm">Evolution of the Economy and Society
<"9.htm">Caudillos and Political Stability
<"10.htm">MODERN URUGUAY, 1875-1903
<"11.htm">The Return of Civilians
<"12.htm">THE NEW COUNTRY, 1903-33
Batlle y Ordóñez and the Modern State
<"13.htm">The Consolidation of Political Democracy
<"14.htm">THE CONSERVATIVE ADJUSTMENT, 1931-43
The Terra Era, 1931-38
<"15.htm">Baldomir and the End of Dictatorship
<"16.htm">THERE'S NO PLACE LIKE URUGUAY, 1943-58
The Administration of Amézaga, 1943-47
<"18.htm">Decline of the Economy and the Colorado Party, 1951-58
<"19.htm">ECONOMIC CRISIS AND DECLINE
The Blanco Administrations, 1959-67
<"21.htm">The Emergence of Militarism, 1972-73
<"22.htm">THE MILITARY GOVERNMENT, 1973-85
The New Situation, 1973-80
<"23.htm">The Military's Economic Record
<"24.htm">The Opposition and the Reemergence of Parties, 1980-84
<"25.htm">The Transition to Democracy, 1984-85
In contrast to most Latin American countries, no significant vestiges of civilizations existing prior to the arrival of European settlers were found in the territory of present-day Uruguay. Lithic remains dating back 10,000 years have been found in the north of the country. They belonged to the Catalan and Cuareim cultures, whose members were presumably hunters and gatherers.
Other peoples arrived in the region 4,000 years ago. They belonged to two groups, the Charrúa and the Tupí-Guaraní, classified according to the linguistic family to which they belonged. Neither group evolved past the middle or upper Paleolithic level, which is characterized by an economy based on hunting, fishing, and gathering. Other, lesser indigenous groups in Uruguay included the Yaro, Chaná, and Bohane. Presumably, the Chaná reached lower Neolithic levels with agriculture and ceramics.
In the early sixteenth century, Spanish seamen searched for the strait linking the Atlantic and the Pacific oceans. Juan Díaz de Solís entered the Río de la Plata by mistake in 1516 and thus discovered the region. Charrúa Indians allegedly attacked the ship as soon as it arrived and killed everyone in the party except for one boy (who was rescued a dozen years later by Sebastian Cabot, an Englishman in the service of Spain). Although historians currently believe that Díaz de Solís was actually killed by the Guaraní, the "Charrúa legend" has survived, and Uruguay has found in it a mythical past of bravery and rebellion in the face of oppression. The fierce Charrúa would plague the Spanish settlers for the next 300 years.
In 1520 the Portuguese captain Ferdinand Magellan cast anchor in a bay of the Río de la Plata at the site that would become Montevideo. Other expeditions reconnoitered the territory and its rivers. It was not until 1603 that Hernando Arias de Saavedra, the first Spanish governor of the Río de la Plata region, discovered the rich pastures and introduced the first cattle and horses. Early colonizers were disappointed to find no gold or silver, but well-irrigated pastures in the area contributed to the quick reproduction of cattle--a different kind of wealth. English and Portuguese inhabitants of the region, however, initiated an indiscriminate slaughter of cattle to obtain leather.
During the sixteenth and early seventeenth centuries, the Charrúas learned the art of horsemanship from the Spaniards in adjacent areas, strengthening their ability to resist subjugation. The Indians were eventually subdued by the large influx of Argentines and Brazilians pursuing the herds of cattle and horses. Never exceeding 10,000 in number in eighteenthcentury Uruguay, the Indians also lacked any economic significance to the Europeans because they usually did not produce for trade. As a result of genocide, imported disease, and even intermarriage, the number of Indians rapidly diminished, and by 1850 the pureblooded Indian had virtually ceased to exist.
In 1680 the Portuguese, seeking to expand Brazil's frontier, founded Colonia del Sacramento on the Río de la Plata, across from Buenos Aires. Forty years later, the Spanish monarch ordered the construction of Fuerte de San José, a military fort at present-day Montevideo, to resist this expansion. With the founding of San Felipe de Montevideo at this site in 1726, Montevideo became the port and station of the Spanish fleet in the South Atlantic. The new settlement included families from Buenos Aires and the Canary Islands to whom the Spanish crown distributed plots and farms and subsequently large haciendas in the interior. Authorities were appointed, and a cabildo (town council) was formed.
Montevideo was on a bay with a natural harbor suitable for large oceangoing vessels, and this geographic advantage over Buenos Aires was at the base of the future rivalry between the two cities. The establishment of the Viceroyalty of the Río de la Plata in 1776, with Buenos Aires as its capital, aggravated this rivalry. Montevideo was authorized to trade directly with Spain instead of through Buenos Aires.
Montevideo's role as a commercial center was bolstered when salted beef began to be used to feed ship crews and later slaves in Cuba. The city's commercial activity was expanded by the introduction of the slave trade to the southern part of the continent because Montevideo was a major port of entry for slaves. Thousands of slaves were brought into Uruguay between the mid-eighteenth and the early nineteenth century, but the number was relatively low because the major economic activity--livestock raising--was not labor intensive and because labor requirements were met by increasing immigration from Europe.
Throughout the eighteenth century, new settlements were established to consolidate the occupation of the territory, which constituted a natural buffer region separating Spanish from Portuguese possessions. To combat smuggling, protect ranchers, and contain Indians, the Spanish formed a rural patrol force called the Blandengues Corps.
In late 1806, Britain, at war with Spain, invaded the Río de la Plata Estuary to avenge Spain's recapture of Buenos Aires from the British. The 10,000-member British force captured Montevideo in early 1807 and occupied it until that July, when it left and moved against Buenos Aires, where it was soundly defeated.
In 1808 Spanish prestige was weakened when Napoleon invaded Spain and installed his brother Joseph on the throne. The cabildo of Montevideo, however, created an autonomous junta that remained nominally loyal to Ferdinand VII as the king of Spain. Montevideo's military commander, Javier Elío, eventually persuaded the Spanish central junta to accept his control at Montevideo as independent of Buenos Aires. In 1810 criollos (those born in America of Spanish parents) from Buenos Aires took the reins of government in that city and unseated the Spanish viceroy. The population of the Banda Oriental was politically divided. The countryside favored recognizing Elío's junta in Buenos Aires; the authorities in Montevideo wanted to retain a nominal allegiance to the Spanish king.
In February 1811, when Elío prepared to take the offensive against <"http://worldfacts.us/Argentina-Buenos-Aires.htm"> Buenos Aires, the interior of the Banda Oriental, led by José Gervasio Artigas, captain of the Blandengues Corps, rose in opposition to Elío, and Artigas offered his services to Buenos Aires. Artigas, then forty-six years old, was the scion of a family that had settled in Montevideo in 1726. Influenced by federalism, Artigas had been dissatisfied with the administration of the former colonial government in Buenos Aires, particularly with its discrimination against Montevideo in commercial affairs. Artigas's army won its most important victory against the Spaniards in the Battle of Las Piedras on May 18, 1811. He then besieged Montevideo from May to October 1811. Elío saved Montevideo only by inviting in the Portuguese forces from Brazil, which poured into Uruguay and dominated most of the country by July 1811. That October Elío concluded a peace treaty with Buenos Aires that provided for the lifting of the siege of Montevideo and the withdrawal of all the troops of Artigas, Portugal, and Spain from Uruguay. Artigas, his 3,000 troops, and 13,000 civilians evacuated Salto, on the Río Uruguay, and crossed the river to the Argentine town of Ayuí, where they camped for several months. This trek is considered the first step in the formation of the Uruguayan nation. The Portuguese and Spanish troops did not withdraw until 1812.
At the beginning of 1813, after Artigas had returned to the Banda Oriental, having emerged as a champion of federalism against the unitary centralism of Buenos Aires, the new government in Buenos Aires convened a constituent assembly. The Banda Oriental's delegates to elect assembly representatives gathered and, under instructions issued by Artigas, proposed a series of political directives. Later known as the "Instructions of the Year Thirteen," these directives included the declaration of the colonies' independence and the formation of a confederation of the provinces (the United Provinces of the Río de a Plata) from the former Viceroyalty of the Río de la Plata (dissolved in 1810 when independence was declared). This formula, inspired by the Constitution of the United States, would have guaranteed political and economic autonomy for each area, particularly that of the Banda Oriental with respect to Buenos Aires. However, the assembly refused to seat the delegates from the Banda Oriental, and Buenos Aires pursued a system based on unitary centralism. Consequently, Artigas broke with Buenos Aires and again besieged Montevideo.
Artigas lifted his siege of Montevideo at the beginning of 1814, but warfare continued among the Uruguayans, Spaniards, and Argentines. In June 1814, Montevideo surrendered to the troops of Buenos Aires. Artigas controlled the countryside, however, and his army retook the city in early 1815. Once the troops from Buenos Aires had withdrawn, the Banda Oriental appointed its first autonomous government. Artigas established the administrative center in the northwest of the country, where in 1815 he organized the Federal League under his protection. It consisted of six provinces--including four present-day Argentine provinces--demarcated by the Río Paraná, Río Uruguay, and Río de la Plata--with Montevideo as the overseas port. The basis for political union was customs unification and free internal trade. To regulate external trade, the protectionist Customs Regulations Act (1815) was adopted. That same year, Artigas also attempted to implement agrarian reform in the Banda Oriental by distributing land confiscated from his enemies to supporters of the revolution, including Indians and mestizos (people of mixed Indian and European ancestry).
In 1816 a force of 10,000 Portuguese troops invaded the Banda Oriental from Brazil and took Montevideo in January 1817. After nearly four more years of struggle, a defeated Artigas fled into exile in Paraguay in September 1820 and remained there until his death in 1850. After routing Artigas, Portuguese Brazil annexed the Banda Oriental as its southernmost Cisplatine Province.
Following its independence from Portugal in 1822, Brazil was confronted by unrest in the Banda Oriental. On April 19, 1825, a group of Uruguayan revolutionaries (the famous Thirty-Three Heroes) led by Juan Antonio Lavalleja, reinforced by Argentine troops, crossed the Río de la Plata from Buenos Aires and organized an insurrection that succeeded in gaining control over the countryside. On August 25, 1825, in a town in the liberated area, representatives from the Banda Oriental declared the territory's independence from Brazil and its incorporation into the United Provinces of Río de la Plata. Brazil declared war on them. The ensuing conflict lasted from December 1825 to August 1828.
In 1828 Lord John Ponsonby, envoy of the British Foreign Office, proposed making the Banda Oriental an independent state. Britain was anxious to create a buffer state between Argentina and Brazil to ensure its trade interests in the region. With British mediation, Brazil and Argentina signed the Treaty of Montevideo at Rio de Janeiro on August 27, 1828, whereby Argentina and Brazil renounced their claims to the territories that would become integral parts of the newly independent state on October 3. However, Argentina and Brazil retained the right to intervene in the event of a civil war and to approve the constitution of the new nation.
Argentine and Brazilian troops began their withdrawal, while a constituent assembly drew up the constitution of the new country, created its flag and coat of arms, and enacted legislation. The constitution was approved officially on July 18, 1830, after having been ratified by Argentina and Brazil. It established a representative unitary republic--the República Oriental del Uruguay (Oriental Republic of Uruguay), the word oriental (eastern) representing the legacy of the original designation of the territory as the Banda Oriental. The constitution restricted voting, made Roman Catholicism the official religion, and divided the territory into nine administrative jurisdictions known as departments.
At the time of independence, Uruguay had an estimated population of just under 75,000, of which less than 20 percent resided in Montevideo, the capital. Indeed, the new nation was born with most of its population scattered throughout the countryside. Political power centered on local leaders, or caudillos, who attracted followers because of their power, bravery, or wealth. There were three major caudillos at the time of independence: Rivera, Oribe, and Lavalleja. The first two were later elected presidents, Rivera from 1830 to 1835 and from 1838 to 1843 and Oribe from 1835 to 1838. Their rivalry, which turned violent in 1836, led to the formation of the first political groups, known as Colorados and Blancos because of the red and white hatbands, respectively, worn during armed clashes beginning in 1836. The groups would subsequently become the Colorado Party and the National Party (the Blancos).
During this period, the economy came to depend increasingly on cattle, on the proliferation of saladeros (meat-salting establishments), and on the export of salted beef and leather. But political instability was the most significant feature of this period. Caudillos and their followers were mobilized because of disputes arising from deficient land demarcation between absentee landowners and squatters and between rightful owners and Artigas's followers who were granted land seized by Artigas. Rivera remained in the countryside for most of his presidency, during which Lavalleja organized three unsuccessful rebellions. Rivera was followed as president by Oribe, one of the ThirtyThree Heroes, but they began to quarrel after Oribe permitted Lavalleja and his followers to return from Brazil. In 1836 Rivera initiated a revolutionary movement against President Oribe, but Oribe, aided by Argentine troops, defeated Rivera's forces at the Battle of Carpintería on September 19, 1836. In June 1838, however, the Colorados, led by Rivera, defeated Oribe's Blanco forces; Oribe then went into exile in Buenos Aires.
Internationally, the new territory was at the mercy of the influence of its neighbors. This resulted from its lack of clearly defined borders, as well as from Rivera's ties with Brazil and Oribe's with Argentina.
Rivera again became the elected president in March 1838. In 1839 President Rivera, with the support of the French and of Argentine émigrés, issued a declaration of war against Argentina's dictator, Juan Manuel de Rosas, and drove Rosas's forces from Uruguay. The French, however, reached an agreement with Rosas and withdrew their troops from the Río de la Plata region in 1840, leaving Montevideo vulnerable to the forces of Oribe and his Argentina. For three years, the locus of the struggle was on Argentine territory. Oribe and the Blancos allied themselves with Argentina's federalists, while Rivera and the Colorados sided with Argentina's rival unitary forces, who favored the centralization of the Argentine state. In 1842 Oribe defeated Rivera and later, on February 16, 1843, laid siege to Montevideo, then governed by the Colorados.
Oribe's siege of Montevideo marked the beginning of the Great War (Guerra Grande, 1843-52). The Great War centered on the nineyear -long siege of Montevideo, described by Alexandre Dumas as a "new Troy," although the city itself suffered relatively little from the war. Britain had saved Montevideo at the outset by allowing the city to receive supplies. During the Great War, there were two governments in Uruguay: the Colorados at Montevideo (the so-called government of the "defense") and the Blancos at Cerrito (Little Hill), a promontory near Montevideo.
The intervention first of France (1838-42) and then of Britain and France (1843-50) transformed the conflict into an international war. First, British and French naval forces temporarily blockaded the port of Buenos Aires in December 1845. Then, the British and French fleets protected Montevideo at sea. French and Italian legionnaires (the latter led by Giuseppe Garibaldi) participated, along with the Colorados, in the defense of the city.
Historians believe that the reason for the French and British intervention in the conflict was to restore normalcy to commerce in the region and to ensure free navigation along the Río Paraná and Río Uruguay, thus guaranteeing access to provincial markets without Buenos Aires's interference. Their efforts were ineffective, however, and by 1849 the two European powers had tired of the war. In 1850 both withdrew after signing a treaty that represented a triumph for Rosas of Argentina.
It appeared that Montevideo would finally fall. But an uprising against Rosas led by Justo José de Urquiza, governor of Argentina's Entre Ríos Province, with the assistance of a small Uruguayan force, changed the situation. They defeated Oribe in 1851, thereby ending the armed conflict in Uruguayan territory and leaving the Colorados in full control of the country. Brazil then intervened in Uruguay in May 1851 on behalf of the besieged Colorados, supporting them with money and naval forces. With Rosas's fall from power in Argentina in February 1852, the siege of Montevideo was lifted by Urquiza's pro-Colorado forces.
Montevideo rewarded Brazil's vital financial and military support by signing five treaties in 1851 that provided for perpetual alliance between the two countries, confirming Brazil's right to intervene in Uruguay's internal affairs; extradition of runaway slaves and criminals from Uruguay (during the war, both the Blancos and the Colorados had abolished slavery in Uruguay in order to mobilize the former slaves to reinforce their respective military forces); joint navigation on the Río Uruguay and its tributaries; tax exemption on cattle and salted meat exports (the cattle industry was devastated by the war); acknowledgment of debt to Brazil for aid against the Blancos; and Brazil's commitment for granting an additional loan. Borders were also recognized, whereby Uruguay renounced its territorial claims north of the Río Cuareim (thereby reducing its boundaries to about 176,000 kilometers) and recognized Brazil's exclusive right of navigation in the Laguna Merín and the Río Yaguarón, the natural border between the countries.
After Rosas went into exile in Britain in 1852, internal strife in Argentina continued until 1861, when the country was finally unified. Uruguay was affected because each Uruguayan faction expressed solidarity with various contenders in Argentina or was, in turn, supported by them.
Brazil's intervention in Uruguay was intensified both because of Argentina's temporary weakness and because of Brazil's desire to expand its frontiers to the Río de la Plata. Brazil intervened militarily in Uruguay as often as it deemed necessary, in accordance with the 1851 treaties. In 1865 the Triple Alliance-- formed by the emperor of Brazil, the president of Argentina, and General Venancio Flores (1854-55, 1865-66), the Uruguayan head of government whom they both had helped to gain power--declared war on Paraguay. Francisco Solano López, Paraguay's megalomaniac dictator, had been verbally rattling his saber against Argentina and Brazil. The conflict lasted five years (1865-70) and ended with the invasion of Paraguay and its defeat by the armies of the three countries. Montevideo, which was used as a supply station by the Brazilian navy, experienced a period of prosperity and relative calm during the war.
After the war with Paraguay, the balance of power was restored between Argentina and Brazil, the guarantors of Uruguayan independence. Thus, Uruguay was able to internalize its political struggles, an indispensable condition for consolidation of its independence.
After the Great War, immigration increased, primarily from Spain and Italy. Brazilians and Britons also flocked to Uruguay to snap up hundreds of estancias (ranches). The proportion of the immigrant population in Uruguay rose from 48 percent in 1860 to 68 percent in 1868. Many were Basques of Spanish or French nationality. In the 1870s, another 100,000 Europeans settled in Uruguay. By 1879 the total population of the country was over 438,000. Montevideo, where approximately one-fourth of the population lived, expanded and improved its services. Gas services were initiated in 1853, the first bank in 1857, sewage works in 1860, a telegraph in 1866, railroads to the interior in 1869, and running water in 1871. The creation in 1870 of the typographers' union, the first permanent workers' organization, was soon followed by the establishment of other unions. Montevideo remained mainly a commercial center. Thanks to its natural harbor, it was able to serve as a trade center for goods moving to and from Argentina, Brazil, and Paraguay. The cities of Paysandú and Salto, on the Río Uruguay, complemented this role.
After the Great War, livestock raising recovered and prospered. Improvements in breeding techniques and fencing were introduced, and between 1860 and 1868 sheep breeding, stimulated by European demand, expanded from 3 million head to 17 million head. A group of modernizing hacendados (landowners), a large number of whom were foreigners, was responsible for this change. In 1871 they established the Rural Association (Asociación Rural) to improve livestock-raising techniques. The association developed a reputation for defending rural traditions and exerting considerable influence on policy makers.
Meat-salting enterprises were the main stimulus for the industrialization of livestock products. In 1865 the Liebig Meat Extract Company of London opened a meat-extract factory at Fray Bentos on the Río Uruguay to supply the European armies, thus initiating diversification in the sector. This type of meat processing, however, was dependent on cheap cattle. As the price of cattle increased, the meat-extract industry declined, along with the saladeros, which prepared salted and sun-dried meat. Cuba and Brazil were the main purchasers of salted meat; Europe, of meat extract; and the United States and Europe, of leather and wool.
Until 1865 the prevailing political idea was fusion (fusión), meaning unity among Uruguayans, the putting aside of the colors and banners that divided them in the past. This idea inspired the administrations of Juan Francisco Giró (1852-53), Gabriel Pereira (1856-60), and Bernardo Berro (1860-64). Hatred and rivalry flared up, however, preventing harmony. Giró was forced to resign. Pereira suppressed almost six coup attempts, and Berro, the last Blanco president until 1958, confronted a revolution led by Colorado Venancio Flores, who took power with the support of Brazil and Buenos Aires. However, General Flores, who had been commanding the armed forces instead of governing the country since that March, was assassinated in Montevideo in 1868, on the same day that Berro was assassinated.
During the period preceding the Great War, the long conflict between church and state also began. It involved Freemasons in government circles and resulted in the expulsion of the Jesuits in 1859 (they were allowed to return in 1865) and the secularization of cemeteries in 1861. Until then the church had almost exclusive control over the cemeteries.
The constitutional government of General Lorenzo Batlle y Grau (1868-72) was forced to suppress an insurrection led by the National Party. After two years of struggle, a peace agreement was signed in 1872 that gave the Blancos a share in the emoluments and functions of government, through control of four of the country's departments. This establishment of the policy of coparticipation (coparticipación) represented the search for a new formula of compromise, based on the coexistence of the party in power and the party in opposition.
A permanent break in the cycle of near anarchy and repression was anticipated when José Ellauri (1872-75) was elected president. His administration was characterized by the predominance of university men over caudillos. A number of them, known as the "Girondists of 73" were sent to the General Assembly. Unfortunately, however, the ensuing economic crisis and the weakness of civil power paved the way for a period of militarism.
Between 1875 and 1886, political parties--as represented by the caudillo and the university sectors--were in decline, and the military became the center of power. A transition period (1886- 90) followed, during which politicians began recovering lost ground, and there was some civilian participation in government. Nevertheless, political parties during this period were not parties in the modern sense of the term. Nor, however, was the army a professional institution despite its successful foreign and domestic campaigns.
Because of serious disturbances, Ellauri was forced to resign in 1875. His successor, José Pedro Varela (1875-76), curtailed liberties, arrested opposition leaders and deported the most notable among them to Cuba, and successfully quelled an armed rebellion. At the beginning of 1876, Colonel Lorenzo Latorre (1876-80) assumed power; he was appointed constitutional president in 1879, but the following year he resigned, after declaring that Uruguayans were "ungovernable," and moved to Argentina.
Colonel General Máximo Santos (1882-86) was appointed president in 1882 by a General Assembly elected under his pressure, and his political entourage named him leader of the Colorado Party. In 1886 Santos suppressed an insurrection led by the opposition, but after an attempt against his life, he too resigned and went to live in Europe.
During this authoritarian period (1875-86), the government took steps toward the organization of the country as a modern state and encouraged its economic and social transformation. Pressure groups, particularly businessmen, hacendados, and industrialists, were organized and had a strong influence on government, as demonstrated by their support of numerous measures taken by the state.
In the international realm, the country improved its ties with Britain. Loans increased significantly after the 1870s, when the first one was granted. In 1876 British investors acquired the national railroad company, the North Tramway and Railway Company. They later dominated construction of railroads and continued their policy of ensuring control over, and concessions to, some essential services in Montevideo, such as gas (1872) and running water (1879). Uruguay's adoption of the gold standard facilitated commercial transactions between the two countries.
Under Latorre's administration, order was restored in the countryside. His government vigorously repressed delinquency and unemployment (those without jobs were considered "vagrants") to protect farmers and ranchers. Fencing of the countryside stimulated modernization of the system. Barbed wired was such an indispensable element for livestock improvement and for the establishment of accurate property boundaries that an 1875 law exempted imports of barbed wire from customs duties. This measure was accompanied by the approval of the Rural Code (1875), drawn up with the participation of the Rural Association. The code ensured land and livestock ownership and thus social order.
The government adopted a number of measures to promote national industrial development. Most important was a series of customs laws in 1875, 1886, and 1888 raising import duties on products that could be manufactured in the country, thus protecting indigenous industry. The Latorre government also improved the means of transportation and communications, giving tax and other concessions for the construction of railroads, whose network doubled in size in ten years. The state also reorganized and took over the postal service and connected all departmental capitals by telegraph.
Education reform authored by Varela and implemented in 1877 under the Latorre administration established free compulsory primary education. Reform also reached the University of the Republic (also known as the University of Montevideo--established in 1849 and the country's only university until 1984), where the medical and the mathematics faculties were created in 1876 and 1877, respectively.
The secularization process also continued during this period. Under the pretext of needing to deal with the chaos in parochial archives, Latorre created the Civil Register (1876), which transferred to the state the registration of births, deaths, and marriages. Under the Santos administration, the Law of Mandatory Civil Marriage (1885) established that only marriages performed in accordance with this law would be considered valid.
General Máximo Tajes (1886-90), who was appointed president by the General Assembly, tried to restore the constitution and remove the military chiefs who had supported Santos. During the Tajes administration, civilian political activity resumed. At the end of the Tajes term, Julio Herrera y Obes was elected president (1890-94). Herrera y Obes belonged to the Colorado Party, had been an adviser to his predecessor, and was instrumental in the transition process that displaced the military from power. He selected his aides from among a small group of friends and was convinced that the executive had to play a leading role in elections and the makeup of the General Assembly. This policy, called the "directing influence," was resisted by a sector of the Colorado Party led by José Batlle y Ordóñez, son of the former president, Lorenzo Batlle y Grau.
In 1894, after much internal debate, the General Assembly appointed Juan Idiarte Borda (1894-97), a member of the inner circle of the departing administration, as the new president. But Herrera y Obes and Borda had succeeded in irritating the National Party, when the latter was granted control of only three of the four departments agreed on in the 1872 pact between the two rival parties.
In 1897 discontent led an armed uprising by Blanco forces. The insurrection was led by Aparicio Saravia, a caudillo from a ranching family originally from the Brazilian state of Rio Grande do Sul who was involved in military and political affairs on both sides of the border. The Saravia revolution raised the flag of electoral guarantees, the secret ballot, and proportional representation. Military action had not yet decided the situation when President Borda was assassinated. The president of the Senate (the upper house of the General Assembly), Juan Lindolfo Cuestas (1897-1903), served as provisional president until 1899, when he was elected constitutional president. Cuestas quickly signed a peace agreement with the National Party, giving it control over six of Uruguay's departments and promising all citizens their political rights. An anticlericalist, Cuestas placed restrictions on the exercise of Roman Catholicism and tried to prevent admission to the country of friars and priests.
A majority of the members of the General Assembly, who had ties to the Herrera y Obes faction, submitted another presidential candidate in 1898 for the scheduled election. Cuestas, unwilling to give up power, led a coup d'état. He included members of the opposition in his government in a rudimentary attempt at proportional representation. Late that same year, the Cuestas regime promulgated the Permanent Civil Register Law, dealing with electoral matters, and the Elections Law, formally establishing the principle of minority representation. Through this legislation, the opposition gained access to one-third of the seats if it obtained one-fourth of the total votes.
The political consensus achieved by Cuestas resulted in the unanimous support by the General Assembly for his candidacy and appointment as constitutional president in 1899. In fact, however, political peace was an illusion. There were, in effect, two countries, one Blanco and one Colorado. President Cuestas had to send an envoy to caudillo Saravia, near the border with Brazil, in order to coordinate government action. This precarious balance would break down in 1903 when Batlle y Ordóñez took power.
In spite of political and economic fluctuations, the flow of immigrants continued. From the 1870s to the 1910s, Uruguay's population doubled to just over 1 million inhabitants, 30 percent of whom lived in Montevideo. Montevideo also continued to experience modernization, including the installation of a telephone system (1878) and public lighting (1886). At the same time, the euphoria and speculation of the 1870s and 1880s saw a proliferation of banks and corporations and a stimulation of land sales, as well as the construction of multifamily dwellings.
The economic crisis of 1890 was a traumatic event for Uruguayan society. Bankruptcies followed one after another, and the banking system saw the collapse of a key banking institution, created by a Spanish financier, which had served the needs of the state and promoted production and construction.
The ruling elite felt the impact, and some of its more progressive sectors directed their efforts to the creation of a development model for the country. They were aware of both the need to encourage agricultural and industrial development and the need to redefine the limits of the state. The growing importance of British investment had stimulated the rise of economic nationalism and had, by 1898, provoked more active state intervention.
State intervention in the economy continued in 1896 when the electric utility company was transferred to the municipality of Montevideo and the Bank of Uruguay (Banco de la República Oriental del Uruguay--BROU) was created as an autonomous entity ( autonomous agency or state enterprise). Moreover, under Cuestas's administration, the state undertook construction of the modern harbor of Montevideo, in reaction to the new facility in Buenos Aires, which had absorbed part of the river traffic with Paraguay and the Argentine littoral. Nevertheless, the nationalization of economic activities and the creation of state enterprises did not fully gather momentum until the administration of Batlle y Ordóñez.
The election of José Batlle y Ordóñez as the first Uruguayan president in the twentieth century (1903-07, 1911-15) marked the beginning of a period of extraordinary change in the country. The son of former President Lorenzo Batlle y Grau, Batlle y Ordóñez was a member of the Colorado Party, founder of the newspaper El Día (in 1886), and an active opponent of militarism.
The dominant political event during the first administration of Batlle y Ordóñez was another National Party insurrection in 1904, led by Saravia. After nine months of fierce fighting and Saravia's death, it ended with the Treaty of Aceguá (1904). The civil war triumph of Batlle y Ordóñez and the Colorados meant the end of the coparticipation politics that began in 1872, the political and administrative unification of the country, the consolidation of the state, and, most profoundly, the end of the cycle of civil wars that had persisted throughout the nineteenth century.
The period's most significant economic change occurred in meat processing. In 1905 the first shipment of frozen beef, produced by a refrigeration plant (frigorífico) established by local investors two years before, was exported to London in a refrigerated ship. Uruguay now entered the age of refrigeration, making possible the diversification of one of its main export items and giving the country access to new markets. With the inauguration of the modernized port of Montevideo in 1909, Uruguay could compete with Buenos Aires as a regional trade center.
Claudio Williman (1907-11), the president's handpicked candidate, succeeded Batlle y Ordóñez, who sailed for Europe, where he spent the next four years studying governmental systems. In some respects, Williman's administration was considered more conservative than that of Batlle y Ordóñez, although Batllists maintained their political influence. Williman tried to ensure political peace by enacting electoral laws in 1907 and 1910 that increased political representation of minority opposition parties. Williman also ensured peace with Uruguay's northern neighbor by signing a border treaty with Brazil, thereby putting an end to pending litigation and disputes dating back half a century.
The National Party, disappointed with Williman's electoral laws and with the announcement that Batlle y Ordóñez would once again run for president, did not participate in the elections held in 1910. This helped foster the emergence of two new political parties: the Catholic-oriented Civic Union of Uruguay (Unión Cívica del Uruguay--UCU) and the Marxist-inspired Socialist Party of Uruguay (Partido Socialista del Uruguay--PSU). Church and state relations also underwent changes. The government passed a divorce law in 1907, and in 1909 it eliminated religious education in public schools.
In 1911 Batlle y Ordóñez was reelected to the presidency. A non-Marxist social democrat, he set about modernizing the country, taking into account the aspirations of emerging social groups, including industrialists, workers, and the middle class. Writing and promoting progressive social legislation, Batlle y Ordóñez fought for the eight-hour workday (enacted in 1915 under the administration of his successor), unemployment compensation (1914), and numerous pieces of social legislation. Some of these would be approved years later, such as retirement pensions (1919) and occupational safety (1920).
Batlle y Ordóñez firmly believed that the principal public services had to be in the hands of the state to avoid foreign remittances that weakened the balance of payments and to facilitate domestic capital accumulation. In a relatively short period of time, his administration established a significant number of autonomous entities. In 1911 it nationalized BROU, a savings and loan institution that monopolized the printing of money. In 1912 the government created the State Electric Power Company, monopolizing electric power generation and distribution in the country; it nationalized the Mortgage Bank of Uruguay; and it founded three industrial institutes for geology and drilling (coal and hydrocarbon explorations), industrial chemistry, and fisheries. In 1914 it purchased the North Tramway and Railway Company, later to become the State Railways Administration.
Attempts to change the agrarian productive structure were not as successful. Influenced by United States economist Henry George, Batlle y Ordóñez thought that he could combat extensive landholdings by applying a progressive tax on land use and a surcharge on inheritance taxes. The agrarian reform plan also contemplated promoting colonization and farming. Very little was accomplished in this regard, however, partly because of the opposition of large landowners who created a pressure group, the Rural Federation (Federación Rural), to fight Batlle y Ordóñez's policies. The government did make one important accomplishment with regard to agriculture, namely, the creation of a series of government institutes dedicated to technological research and development in the fields of livestock raising, dairying, horticulture, forestation, seeds, and fodder.
The government adopted a protectionist policy for industry, imposing tariffs on foreign products, favoring machinery and raw materials imports, and granting exclusive licensing privileges to those who started a new industry. Indigenous companies sprang up, but foreign capital--especially from the United States and Britain--also took advantage of the legislation and came to control the meat industry. The growth of the frigorífico meat-processing industry also stimulated the interbreeding of livestock, Uruguay's main source of wealth.
Education policy was designed to take into account the continuous inflow of European migrants. Although it fluctuated, immigration was significant until 1930. Furthermore, education was a key to mobility for the middle classes. The state actively sought to expand education to the greatest number of people by approving free high school education in 1916 and creating departmental high schools throughout the country in 1912. A "feminine section" was created to foster mass attendance of women at the University of the Republic, where the number of departments continued to expand.
The secularization process, initiated during the second half of the nineteenth century, was accelerated by Batlle y Ordóñez's anticlericalism. Uruguay banned crucifixes in state hospitals by 1906 and eliminated references to God and the Gospel in public oaths in 1907. Divorce laws caused a confrontation between church and state. In addition to the 1907 and 1910 laws (divorce with cause and by mutual agreement), a law was passed in 1912 allowing women to file for divorce without a specific cause, simply because they wanted to.
Batlle y Ordóñez also proposed the institutional reorganization of government in 1913. Essentially, he wanted to replace the presidency with a nine-member collegial executive (colegiado) inspired by the Swiss model. This proposal caused an immediate split in the Colorado Party. One sector opposed the political reform and also feared some of Batlle y Ordóñez's economic and social changes. Subsequently, these dissidents, led by Carlos Manini Ríos, founded a faction known as the Colorado Party-General Rivera (Riverism). The National Party, under Luis Alberto de Herrera, the leading opposition figure from 1920 to his death in 1959, did not back Batlle y Ordóñez's proposal either.
Feliciano Viera (1915-19), a Colorado who was more conservative than Batlle y Ordóñez, became president at the time of the debate between "collegialists" and "anticollegialists." During his mandate, elections were held for a constituent assembly (July 30, 1916). The rules for this election enabled the National Party to ensure incorporation of many of the principles it advocated, such as the secret ballot, partial proportional representation, and universal male suffrage.
Batlle y Ordóñez and his political faction of the Colorados lost these first popular elections, but the Colorados continued to be the majority party, and the 1917 constitution, the country's second, reflected many of the changes that had taken place under Batlle y Ordóñez. It separated church and state, expanded citizens' rights, established the secret ballot and proportional representation, and banned the death penalty. It also created autonomous state enterprises in the areas of industry, education, and health. But in a bitter compromise for Batlle y Ordóñez, the executive was divided between the president, who appointed the ministers of foreign affairs, war, and interior, and the nine-member colegiado, the National Council of Administration (Consejo Nacional de Administración). The latter, which included representatives from the party that received the second highest number of votes, the Blancos, was placed in charge of the ministries dealing with economic, educational, and social policy.
President Viera, like many of Batlle y Ordóñez's followers, interpreted the 1916 electoral defeat as a direct consequence of previous policy. He thus announced a halt to economic and social reforms. Some of the old projects as well as some new proposals were approved, however, such as restrictions on night work in 1918 and the creation in 1916 of a new autonomous entity, the Montevideo Port Authority, as known as the National Administration of Ports (Administración Nacional de Puertos-- ANP). Workers' strikes, however, were repressed severely. Finally, in 1919 Viera, in disagreement with Batlle y Ordóñez, founded a dissident Colorado Party faction known as Vierism.
The 1920s witnessed electoral struggles in which the various parties sought to consolidate the political peace achieved in 1904. The National Party participated actively in political life, and although the Colorado Party was dominant, its electoral advantage was slight. Relative electoral parity and the still recent memory of the last armed uprising compelled participants to preserve electoral purity and to improve the corresponding legislation. In 1924 the Electoral Court was created to prepare and control national elections. The 1917 constitution eliminated restrictions on male suffrage and required elections almost every year to renew the various governmental bodies.
Each political party was internally divided because of ideological, economic, and social differences. To the existing Colorado factions--Riverism and Vierism--were added the Colorado Party for Tradition (also known as Sosism), founded by Julio María Sosa in 1925, and the Advance Grouping (Agrupación Avanzar), founded by Julio César Grauert in 1929. Splinter groups of the National Party included the Radical Blanco Party, founded by Lorenzo Carnelli in 1924, and Social Democracy, founded by Carlos Quijano in 1928. The small PSU also split in 1920, and one of its factions formed the Communist Party of Uruguay (Partido Comunista del Uruguay--PCU). The parties were divided into "traditional" (Colorado Party and National Party) and "minor," or "ideological," parties (UCU, PSU, and PCU). The former, by means of a 1910 law that allowed a double simultaneous vote for a party and a faction of the party (sub-lema), became "federations" of parties with different agendas and were thus able to attract followers from all sectors of society.
These contradictions forced Batlle y Ordóñez to make electoral arrangements with his opponents within the Colorado Party to prevent the victory of the National Party. The resultant "politics of compromise" diluted his reformist agenda. Baltasar Brum (1919-23), one of Batlle y Ordóñez's followers and a former foreign minister, was succeeded as president by a "neutral" Colorado, José Serrato (1923-27), who turned over the office to a Riverist, Juan Campisteguy (1927-31).
It was difficult for adherents of Batllism to implement their agenda despite having the occasional support of other political sectors. Nevertheless, additional social reforms were enacted. In 1920 compensation for accidents in the workplace and a six-day work week were made law. In 1923 a minimum rural wage was passed, although it was never enforced. A social security system was created in 1919 for public sector employees, and the program was extended to the private sector in 1928. Despite the reforms, a union movement, weak in numbers, was organized in several umbrella organizations: the Uruguayan Syndicalist Union, encompassing anarcho-syndicalists and communists, in 1923; and the communist General Confederation of Uruguayan Workers, in 1929.
The only state enterprise created during these years reflected the difficulties in expanding state control over industry because of opposition from the conservatives. Ranchers complained that foreign refrigeration plants, which had established quotas for shipments and for access of meat to the London market, did not pay a fair price for cattle. In 1928 the government created National Refrigerating (Frigorífico Nacional-- Frigonal) as a ranchers' cooperative supported by the state and governed by a board made up of representatives from the government, the Rural Association, and the Rural Federation.
Although the country had suffered the immediate consequences of the post-World War I crisis, a period of recovery had quickly followed. It was characterized by growing prosperity sustained mainly by United States loans. A continued increase in population accompanied economic prosperity. The 1920s saw the arrival of the last great wave of immigrants, consisting mainly of Syrians, Lebanese, and eastern Europeans. Between 1908 and 1930, Montevideo's population doubled.
In 1930 Uruguay celebrated the centennial of the promulgation of its first constitution and won its first World Cup in soccer. Elections were held that year, the results of which were to presage difficulties, however. Batlle y Ordóñez died in 1929, leaving no successor for his political group. The Blanco leader, Herrera, was defeated by a wide margin of votes for the first time. The electoral balance between the parties had been broken. By a few votes, the conservative Colorado Manini, a Riverist leader and newspaper publisher, failed to become president.
Gabriel Terra (1931-38), a "heterodox" Batllist who had differed with Batlle y Ordóñez and who would soon distance himself from the latter's sons and followers, became president in March 1931. For the first time, the Batllist wing of the Colorados had a strong representation in the colegiado.
Terra's inauguration coincided with the effects of the Great Depression and a worsening of Uruguay's economic and social situation. Prices of agricultural products plunged. In 1932 Britain, traditionally the major purchaser of Uruguayan exports, began restricting purchases of meat. Uruguay's currency was devalued, and unemployment grew rapidly.
Batllists tried to implement their program from the colegiado. In 1931 BROU was authorized to control purchases and sales of foreign exchange and to set exchange rates, a measure that initially jeopardized cattle ranchers, exporters, and private banks. In the face of foreign exchange scarcity, foreign companies were forced to suspend remittances abroad. Limits on imports were imposed to try to reduce the balance of payments deficit and to stimulate industrialization. Furthermore, attempts were made to reduce the fiscal deficit. At the same time, a political agreement known as the Pork Barrel Pact (Pacto del Chinchulín) between the Batllists and an emerging sector of the National Party opposing Herrera made possible the expansion of state control over industry. The pact resulted in the creation of the National Administration of Fuels, Alcohol, and Portland Cement (Administración Nacional de Combustibles, Alcohol, y Portland--ANCAP), a state enterprise with a monopoly over oil refining and alcohol production, and the power to begin producing portland cement. Unfortunately, it quickly became a source of patronage for the party faithful. The State Electric Power Company was granted a monopoly over the telephone system, becoming the State Electric Power and Telephone Company (Usinas Eléctricas y Teléfonos del Estado--UTE).
Social reform measures, such as the adoption of the forty- four-hour work week, and the growing economic crisis alarmed the most conservative sectors and affected the interests of large cattle ranchers, import merchants, foreign capital, and the population at large. The social climate became tense as a result of the lack of jobs. There were confrontations in which police and leftists died.
Terra distanced himself from his followers and began a campaign to reform the constitution and eliminate the colegiado, which was responsible for making economic and social policy and which Terra accused of inefficiency and lack of vision to overcome the crisis. He was supported by the National Economic Inspection Committee, which was created in 1929 and encompassed most business organizations. This committee proposed restricting statism, ending implementation of social legislation, and suspending the application of new taxes.
During the first months of 1933, when it became evident that Uruguay would have serious difficulties in paying the interest on its foreign debt, Terra obtained the support of Herrera and of Manini to organize a coup d'état. On March 31, 1933, Terra dissolved the General Assembly and the colegiado and governed by decree. Former President Brum (a Batllist) committed suicide one day after the fall of the liberal democratic regime. Another Batllist leader, Grauert, was assassinated. The Terra regime deported numerous opposition leaders and imposed press censorship.
In June 1933, elections were held for a constituent assembly that would be responsible for reforming the constitution. In 1934 the new constitution was submitted to a plebiscite, and although reelection of the president was unconstitutional, Terra was elected to a new term. More than half of the electorate participated in these elections, distributing their preferences between parties supporting the coup and those opposing it. The constitution promulgated in 1934 formally eliminated the colegiado and transferred its powers to the president. The new constitution restricted the creation of autonomous entities by requiring approval by a two-thirds majority in each chamber of the General Assembly. It banned usury, recognized certain social rights (e.g., housing and the right to work), and established women's suffrage. The cabinet ministers and heads of autonomous enterprises were to be distributed between the two parties obtaining the most votes, in a two-thirds to one-third ratio. The Senate was to be divided in half between the two parties winning the most votes, thus ensuring control by the coup factions. The Chamber of Representatives was to be elected by proportional representation.
In the mid-1930s, the opposition tried, unsuccessfully, to organize itself and resist the regime in the face of persecution. Military and armed civil uprisings were suppressed. In 1935 a political opponent unsuccessfully tried to assassinate Terra. An attempt to form a "popular front," including the left and dissident Colorados and Blancos, was also unsuccessful. To prevent this coalition, as well as a coalition of sectors from the traditional parties, from opposing the regime's social and economic policies, a series of electoral laws was promulgated beginning in 1934. The new Political Parties Law granted control of the Colorado and Blanco slogans, or party titles, to those who had participated in the elections and therefore supported the dictatorship.
Support from ranchers, one of the sectors most affected by the crisis, seemed to indicate a return to the traditional agro- exporting model. However, neither the "machete dictatorship" (an ironic name given to the regime by the socialist leader and writer Emilio Frugoni, referring to Terra's use of the police during the coup) nor the "March Revolution" (as it was solemnly called by its organizers) stressed an agrarian alternative because unemployment seemed to call for a diversification of the job market. Moreover, Uruguay was already an urban country with budding industrialization.
Terra's economic policies supported both livestock raising and industry, if unevenly. Livestock had stagnated--the 1930 livestock census showed fewer animals than the 1908 census. The problem of increasing livestock productivity remained unsolved, despite advances in breeding. Cattle ranchers were granted premiums in order to improve the quality of herds. Other benefits accorded them included tax rebates, debt-servicing alternatives, preferential exchange privileges, and the effects of the 1935 devaluation. At the same time, import limitations adopted in 1931 continued in effect, and in 1935 an industrial franchise law was passed. Industrial activities were further protected by currency depreciation and the fall in salaries caused by an abundance of labor.
The Terra government also attempted to regulate foreign trade. BROU maintained control over the price and sale of foreign currency. In 1934 the government created the Honorary Commission for Imports and Exchange to control the allotment of import quotas and foreign exchange. The government used pesos to pay the reduced interest rates on the foreign debt. It also carried out, in 1937, satisfactory negotiations for a new payment schedule with the United States and, in 1939, with Britain.
In general, the Terra government weakened or neutralized economic nationalism and social reform, the most controversial facets of the Batllist model. British public-service industries (railroads, water, gas, and tramways) and United States industries (oil, cement, refrigeration plants, and automobiles) that were established in the early 1900s received additional concessions. The government did not privatize existing state enterprises, as would have been expected from the antistatism espoused by Herrerists and Riverists. State enterprises were, however, affected in 1936 by a law that eliminated provisions granting some autonomous state enterprises the power to establish monopolies. ANCAP began constructing an oil refinery, and in 1938 it guaranteed private oil companies participation in Uruguay's market.
Nevertheless, although the government abolished certain redistributive policies fostered by social legislation, it reinforced the public assistance role of the state. It created "emergency jobs" for the unemployed through the National Affordable Housing Institute (1937) and the Institute for the Scientific Nutrition of the People (1937). In 1934 legislation was passed that regulated child labor for minors over twelve years of age, allowed maternity leave, and extended pensions to all commercial and industrial sectors, including employers.
The government also revamped the education system. The University of the Republic, whose structure had been transformed by the creation of new faculties (for example, engineering and architecture in 1915, chemistry and dentistry in 1929, and economics in 1932), no longer administered secondary education, which in 1935 was handed over to an autonomous agency.
The foreign policy of the regime resulted in a substantial improvement of relations with the United States (Franklin D. Roosevelt visited Uruguay in 1936) and with Britain. Under a 1935 pact with Britain, Uruguay agreed to pay its foreign debt, to purchase British coal, and to treat British companies generously in exchange for ensuring placement of Uruguayan products. In 1935 Uruguay severed relations with the Soviet Union and in the next year, with Republican Spain. At the same time, however, it established closer relations with Benito Mussolini's Italy and Adolf Hitler's Germany. Construction of a hydroelectric dam at Paso de los Toros on the Río Negro was begun in 1937 with German capital, creating the Embalse del Río Negro, the largest artificial lake in South America.
In 1938 general elections were held--the first in which women were allowed to vote. Terra divided his support between his son-in-law's father, Eduardo Blanco Acevedo, and his brother-in-law, General Alfredo Baldomir. These candidacies reflected a split in Terra's political faction within the Colorado Party. The PSU and PCU joined forces to vote for a common candidate, but the Colorado Party won. Baldomir (1938-43) was elected president. Once again, Batllists, Independent Nationalists, and Radical Blancos abstained from voting.
After his inauguration, and after suppressing a coup attempt, Baldomir announced his intention to reform the 1934 constitution but then procrastinated on carrying out the project. Several months later, the opposition led one of the most important political demonstrations in the history of the country, demanding a new constitution and a return to democracy. Under pressure from organized labor and the National Party, Baldomir advocated free elections, freedom of the press, and a new constitution.
Baldomir's administration could not avoid the consequences of World War II or the pressures and interests of the Allied forces. Although he declared Uruguay's neutrality in 1939, that December the Battle of the Río de la Plata took place. The badly damaged German battleship Graf Spee, cornered by a British naval force and required by the Uruguayan government to leave its refuge in the port of Montevideo, was blown up and scuttled by its own crew just outside the harbor. After this, Uruguay assumed a pro-Allied stance. In 1940 it began an investigation of Nazi sympathizers and finally, in 1942, broke relations with the Axis.
The Blancos persistently attempted to obstruct legislation introduced by Baldomir and criticized the Colorados' policy of cooperation with the United States in hemispheric defense. Baldomir's Blanco ally, Herrera, fought for neutrality, and in 1940 Herrera opposed the installation of United States bases in Uruguay. In 1941 Baldomir forced his three Herrerist ministers to resign; they had been appointed to his cabinet in accordance with provisions of the 1934 constitution. Baldomir subsequently appointed a board, without the participation of Herrerists, to study a constitutional reform. Finally, in February 1942 Baldomir dissolved the General Assembly and replaced it with the Council of State (Consejo de Estado), composed of Batllists and other Colorados. This quasi-coup was carried out without arrests, deportations, or the closing of newspapers. It was an in-house agreement to overcome the institutional crisis initiated on March 31, 1933, and to avoid enforcement of the existing constitution. Batllists and Communists welcomed the new situation, but the Socialists argued that Baldomir had been one of the protagonists of the 1933 coup. Independent Nationalists remained on the sidelines. Herrerism, freely accused of being pro-Nazi, proFranco , and pro-Argentine, was the big loser.
In November 1942, national elections were held. Although an electoral law had been passed in 1939 to avoid the formation of coalitions that would endanger the two-party system (Blancos and Colorados), Independent Nationalists were allowed to participate as a new political party, separate from Herrerism. Thus, the National Party divided into two splinter parties and continued as such until 1958. Socialists and Communists were also split, a situation that continued until 1971, when the Broad Front Coalition was created. Batllists supported the Colorado candidate, Juan José Amézaga (1943-47), who won the election.
At the same time, a new constitution was submitted to plebiscite and was approved by 77 percent of the electorate. As amended on November 19, 1942, the constitution retained the presidency, restored the General Assembly, implemented strict proportional representation in the Senate, and abolished the mandatory coparticipation imposed by the 1934 constitution for ministries and boards of autonomous entities.
After Amégaza reinstitutionalized and restored civil liberties, Uruguay entered a new historical era, characterized by the increasing importance of industrialization and significant gains for virtually all sectors of society. No other phrase expresses as eloquently perceptions about this period by the average citizen as the slogan proclaimed by a politician: "Como el Uruguay no hay" (There's no place like Uruguay). During the Amézaga administration, the state reorganized its interventionist and welfare role and strongly pushed social legislation. In 1943 the government implemented a system of wage councils (including representatives from the state, workers, and employers) to set salaries, and it established a family assistance program. In 1945 the General Assembly passed legislation requiring paid leave for all work activities, as well as other legislation that addressed the needs of rural workers, one of Uruguay's poorest sectors. In 1943 the rural workers were incorporated into the pension system, and in 1946 the Rural Worker Statute set forth their rights and also put women's civil rights on a par with men's.
From the beginning of the 1940s, and especially after creation of the wage councils, real wages increased, which meant an improvement in the living standards of the working class and dynamism in the internal market. The period of increased industrial development lasted from 1945 to 1955; total production practically doubled during this time. Agriculture also experienced a boom. Social legislation was improved, the pension system was expanded, and the state bureaucracy grew. Resorts near Montevideo were developed through the sale of lots on the installment plan, and Punta del Este became an international tourist attraction. Gold reserves in BROU reached their highest level ever. In 1950, when Uruguay again won the World Cup in soccer, it was already known as the "Switzerland of South America."
Batllism returned to power with the victory of the presidential ticket of Tomás Berreta (1947) and Luis Batlle Berres (1947-51) in the 1946 elections. Berreta's administration was brief--he died six months after taking office and was succeeded by his vice president, Batlle Berres.
Batlle Berres, a nephew of José Batlle y Ordóñez, represented the most popular faction of Batllism, later to be known as Unity and Reform (Unidad y Reforma), or List 15 because of the list number under which it would participate in successive elections. He gradually became estranged from his cousins--Lorenzo and César, Batlle y Ordóñez's sons--who promoted a more conservative vision from their newspaper, El Día, and who would later form a new Colorado Party faction--List 14. Batlle Berres founded his own newspaper (Acción) in 1948, bought a radio station, and surrounded himself with young politicians. His ideological-political agenda, adapted to the changes in his country and the world, became known as neo-Batllism. He rejected the communist and populist-authoritarian experiences of other Latin American countries, especially that of Juan Domingo Perón in Argentina. Batlle Berres formed a multiclass movement that promoted compromise and conciliation. He believed the state's role was to safeguard social peace and to correct, through adequate measures, the "unfair differences" created by the socioeconomic structure. In contrast with Peronism, neo-Batllism respected the political autonomy of the workers' movement, accepted social cooperation, and rejected the kind of corporative structure that characterized Mexico's governing party.
Batlle Berres was an enthusiastic supporter of economic development based on import-substitution industrialization and agricultural expansion. He applied interventionist and statist economic measures to promote such development and did not abide by the IMF's austerity recommendations. He supported agriculture and industry through credits and subsidies, as well as control over the nation's currency, a fact that brought him into conflict with ranchers. BROU, which controlled sales of foreign currency, paid less for foreign currency earned from livestock raising to favor industrial requirements for raw materials and machinery. This differential exchange rate policy stimulated the development of light industry, more than 90 percent of which was directed toward the internal market. Nevertheless, the state guaranteed profitable prices for agriculture and stimulated imports of agricultural machinery. New crops were developed to supply industry with raw materials, and surpluses were exported. By contrast, livestock raising continued to stagnate.
An earlier agreement with Britain obliged the government to acquire some British enterprises to cancel its outstanding debt to Britain. The state's economic role was thus increased through the creation of new public service enterprises, including Montevideo's tramways, railroads, and water system.
Another potentially significant event in the socioeconomic realm was the creation of the National Land Settlement Institute in 1948. It was designed to stimulate land subdivision and agricultural and livestock settlements and was authorized to purchase and expropriate land. But action was limited because of a lack of funds, and significant agrarian reform never took place. However, in order to favor lower-income groups, subsidies were set for various basic food items, and in 1947 the National Subsistence Council was created to control the price of basic items.
The traditional parties maintained their differences, which were reflected in the significant variations in their platforms. The Political Parties Law, which allowed party factions to accumulate votes, guaranteed the predominance of the Colorado Party. Together, the Colorados and Blancos continued to capture almost 90 percent of the votes. But because of the splits in his own party, Batlle Berres was forced to seek political support from other factions. Paradoxically, he sought a "patriotic coincidence" with Herrera and gave cabinet posts to some leading figures of Terrism, past enemies within his own party.
Conservative sectors, particularly landowners, opposed or distrusted the growing bureaucracy, the expansion of social legislation, and the policy of income redistribution that favored the industrial sector to the detriment of the rural sector. In 1950 Benito Nardone--an anticommunist radio personality supported by Juan Domingo R. Bordaberry, one of the directors of the Rural Federation (and father of Juan María Bordaberry Arocena; president, 1972-76)--created the Federal League for Rural Action (Liga Federal de Acción Rural--LFAR). The Ruralist faction thus created attempted to unite the disenchanted rural middle-class constituencies, especially wool producers, from both traditional parties. He proposed a free-market economic model in contrast to Luis Batlle Berres's statist model.
Unity and Reform won the 1950 elections. Its presidential candidate was a Batllist, Andrés Martínez Trueba (1951-55), who quickly put forward a new constitutional amendment, this time to make good on Batlle y Ordóñez's dream of a purely plural executive, the colegiado. He was supported by Herrera, who was seeking to enhance both his personal power and Blanco political power and to recover the ground lost in the 1942 coup. He was also supported by conservative Colorado factions who feared Batlle Berres's becoming president again.
The new constitution was approved by plebiscite in 1951 and went into effect in 1952. It reestablished the colegiado as the National Council of Government (Consejo Nacional de Gobierno). The council had nine members, six from the dominant faction of the majority party and three from the party receiving the second highest number of votes--two from its leading faction and one from it second-ranking faction. The presidency was to rotate each year among the six members of the majority party. The constitution mandated coparticipation in directing autonomous entities and ministries, using a three-and-two system (three members appointed by the majority party on the council and two by the minority party). Uruguay enjoyed unprecedented prosperity at this time, and the establishment of a purely collegial, Swissstyle executive reinforced the country's title as the "Switzerland of South America."
The Martínez administration in the first half of the 1950s, however, was one of economic decline. At the end of the Korean War (1950-53), during which Uruguay had exported wool for coldweather uniforms, Uruguay experienced a reduction in exports, a drop in the price of agricultural and livestock products, labor unrest, and unemployment. Livestock production, which had basically stagnated since the 1920s, was not capable of providing the foreign exchange needed to further implement the import-substitution industrialization model. Starting in 1955, the industrial sector stagnated and inflation rose. At the same time, Uruguay had difficulties with the United States regarding wool exports and suffered the negative effects of both restrictive United States trade policies and competition from the foreign sales of United States agricultural surpluses.
In 1951 a faction opposing the more radical leadership of the General Union of Workers (Unión General de Trabajadores--UGT; established in 1942) founded the General Confederation of Labor. Nevertheless, strikes and stoppages continued. In 1952, in the face of labor unrest, the National Council of Government invoked the emergency provision of the constitution known as the medidas prontas de seguridad (prompt security measures). From 1956 to 1972, the gross national product ( GNP) fell 12 percent, and in the decade from 1957 to 1967 real wages for public employees fell 40 percent. In 1958 the General Assembly approved strike insurance and maternity leave. In addition, worker and student mobilization pressured the General Assembly into approving the Organic University Law, whereby the government recognized the autonomy of the University of the Republic and the right of professors, alumni, and students to govern it. Nevertheless, labor unrest increased.
At first, dramatic political events masked the economic crisis. In the 1958 elections, the Independent Nationalists, who had joined the Democratic Blanco Union (Unión Blanca Democrática- -UBD), agreed to include their votes under the traditional National Party of the Herrerists. Thus, for the first time in decades, the National Party voted as one party. In addition, Herrera joined forces with Nardone and his LFAR, transforming it from a union into a political movement. Aided by the LFAR and a weakening economy, the National Party won, and the Colorado Party lost control of the executive for the first time in ninety-four years.
From March 1959 to February 1967, eight National Party governments ruled Uruguay. The death of Herrera (1959) aggravated divisions in the National Party and demonstrated the fragility of the electoral accords that had led to its victory. The economic crisis and social unrest that had beset Uruguay from the mid1950s continued, and the 1960s opened with gloom and sadness for the country. At the time of the 1962 elections, inflation was running at a historically high 35 percent. The Colorado Party was defeated once again, although by a much smaller margin of votes (24,000 as compared with 120,000 in 1958). The National Party split. The UBD joined a splinter faction of Herrerism, the Orthodox faction, led by Eduardo Víctor Haedo. Another faction of Herrerism, led by Martín R. Echegoyen (1959-60), kept its alliance with Nardone's Ruralists. At the same time, divisions between the List 14 faction and Unity and Reform were intensified in the Colorado Party.
Important changes also took place in the minor parties. Catholics formed the Christian Democratic Party (Partido Demócrata Cristiano--PDC). Communists formed a coalition with other minor parties, the Leftist Liberty Front (Frente Izquierda de Liberdad--Fidel). The PSU joined with intellectuals and dissidents from traditional parties and formed the Popular Union (Unión Popular).
The thin majority of the governing party, as well as its internal divisions, hindered the administration of the National Council of Government during the 1963-67 period. In 1964 the political scene was further affected by the death of two important leaders: Batlle Berres and Nardone. That same year, the workers movement formed a single centralized union, the National Convention of Workers (Convención Nacional de Trabajadores--CNT). In addition, a new political protagonist appeared. In 1962 Raúl Antonaccio Sendic, head of the sugarcane workers from the north of the country, formed, together with other leftist leaders, the National Liberation Movement-Tupamaros (Movimiento de Liberación Nacional-Tupamaros--MLN-T), a clandestine urban guerrilla movement.
Economically, the 1958 Blanco victory brought ranching and agricultural forces to power. This led to the implementation of liberal (free-market) economic policies aimed at eliminating the protectionist-interventionist model that had fostered industrial development. In 1960 Uruguay agreed to sign its first letter of intent with the IMF. The Blanco government devalued the currency and established a single, free monetary exchange market (while maintaining the interventionist role of BROU), as well as the free import and export of goods and services. The reorientation of economic policy tended to favor the agro-exporting sector. However, the model could not be applied fully, nor in an orthodox manner. Inflation increased to more than 50 percent per year between 1963 and 1967, and in 1965 an overstretched financial system and massive speculation produced a banking crisis. Labor and social conflict increased as well, and a state of siege was imposed in 1965.
To try to solve the problem of economic stagnation, the government complied with one of the principal recommendations of the Alliance for Progress (a United States program to help develop and modernize Latin American states) by preparing a tenyear development plan. However, virtually none of the plan's recommendations were ever put into practice.
During the Blanco era, sectors from both traditional parties had begun blaming the country's difficulties on the collegial constitutional arrangement of executive power. In the 1966 elections, three constitutional amendments were submitted. The approved changes, supported by Blancos and Colorados, were incorporated in the 1967 constitution, which put an end to the collegial executive, thereby returning the country to a presidential regime; granted increased powers to the executive; and extended the presidential term to five years. They also eliminated the three-and-two (coparticipation) system for appointing heads of autonomous entities and ministries and created new state agencies to modernize government: the Office of Planning and Budget; the Social Welfare Bank; and the Central Bank of Uruguay. High school education became compulsory.
Given the growing economic and social crisis, it was not surprising that the Colorado Party won the November 1966 elections. In March 1967, General Oscar Gestido (1967), a retired army general who had earned a reputation as an able and honest administrator when he ran the State Railways Administration, became president. He was supported by the Colorado and Batllist Union (Unión Colorada y Batllista--UCB), comprising List 14 and other conservative Colorados.
Between June and November of 1967, the government, with the influence of some Batllists, attempted to reverse economic and social policies implemented since 1959 and to return to the old developmentalist model. But in November, César Charlone, responsible for economic policies under Terra, became head of the Ministry of Economy and Finance. He agreed to the IMF's suggestions, again establishing a unified exchange market and drastically devaluing the currency. Inflation exceeded 100 percent in 1967, the highest in the country's history.
In December President Gestido died and was succeeded by his vice president, Jorge Pacheco Areco (1967-72). A little-known politician and former director of the newspaper El Día, Pacheco would leave an indelible mark on Uruguay. Within one week of taking office, Pacheco issued a decree banning the PSU and other leftist groups and their press, which he accused of subverting the constitutional order and advocating armed struggle. To implement the new monetarist policy adopted in 1968, Pacheco appointed Alejandro Végh Villegas as director of the Office of Planning and Budget. In a sharp policy change, Pacheco decreed a wage and price freeze in June 1968 to try to control inflation. He also created the Productivity, Prices, and Income Commission (Comisión de Productividad, Precios, e Ingresos-- Coprin) to control the price of basic food items. In 1968 real wages were the lowest in the decade, and inflation reached a maximum annual rate of 183 percent that June.
The newly created umbrella labor organization, the CNT, resisted these economic policies, and student and other social conflict intensified. The government responded by repressing strikes, work stoppages, and student demonstrations. The death of a student, Líber Arce, during a protest paralyzed Montevideo, and relations between the University of the Republic and the government further deteriorated. The prompt security measures, a limited form of a state of siege, which had been included in the constitution to deal with extraordinary disturbances of domestic order and applied in 1952 and 1965, were enforced during almost all of Pacheco's time in office. He justified his actions, which included drafting striking bank and government employees to active military service, on the basis of the growing urban guerrilla threat from the Tupamaros.
During this period, the Tupamaros had grown in strength, and their actions--robberies, denunciations, kidnappings, and, eventually, killings--shook the country and became known worldwide. The General Assembly acquiesced twice in the suspension of all civil liberties, once for twenty days following the assassination in August 1970 of Dan A. Mitrione, a United States security official, and then for forty days following the kidnapping of British ambassador Geoffrey Jackson in January 1971--both by the Tupamaros. On September 9, 1971, after the escape from prison of more than 100 Tupamaros, Pacheco put the army in charge of all counterguerrilla activity.
The November 1971 national elections were held in a relatively quiet atmosphere because of a truce declared by the Tupamaros. Uruguayan society had become polarized. Political sectors supporting Pacheco promoted his reelection to a new presidential term, as well as the corresponding constitutional amendment to legitimize it. The left was able to unite and draw supporters from traditional parties, such as the Colorado Party's List 99. The new coalition was named the Broad Front (Frente Amplio). In the National Party, a faction of Herrerists chose General Mario Aguerrondo, considered a hard-liner, as its presidential candidate. Liberal Blancos supported the reformist program of a new movement, For the Fatherland (Por la Patria-- PLP), led by Senator Wilson Ferreira Aldunate.
The constitutional amendment did not succeed, but Pacheco's handpicked successor, Juan María Bordaberry Arocena of the Colorado Party, won the controversial elections by some 10,000 votes, after a mysterious halt in the vote count. It was noteworthy, however, that Ferreira obtained a large number of votes (he was actually the candidate receiving the most votes--26 percent of the total to Bordaberry's 24 percent), and the left increased its following, receiving about 18 percent of the votes. Bipartisan politics had come to an end, replaced by a multiparty system bitterly divided by political, social, economic, and ideological differences. In economic terms, the stabilization measures taken between 1969 and 1971 by the Pacheco administration to increase wages and reduce inflation had been moderately successful. But by 1972, the situation was out of control again. Another free market, monetarist experiment would have to await the imposition of an authoritarian regime.
In March 1972, Bordaberry was sworn in as president (1972-76). He ran as a Colorado, but he had been active in Nardone's Ruralist movement and had been elected to the Senate as a representative of the National Party. Bordaberry's narrow victory forced him to seek the support of other political parties. He found it in Mario Aguerrondo's Herrerist faction of the National Party and in the Colorado Party's Unity and Reform, led by Jorge Batlle Ibáñez, a son of Luis Batlle Berres, who had founded the faction.
Bordaberry appointed Julio María Sanguinetti Cairolo, who headed a faction of Unity and Reform, as minister of education and culture. Sanguinetti promoted education reform that brought together primary, secondary, and vocational education under the National Council for Education (Consejo Nacional de Educación-- Conae) and established secret and mandatory voting for the election of university authorities. Unity and Reform also took charge of economic policy by implementing a five-year development plan inspired by neoliberal (free market) and monetarist principles, which would slowly open the economy to greater influence from financial and commercial groups, as well as to foreign investment.
The Bordaberry administration, however, continued its predecessor's policies, giving greater budgetary priority to the military than to education and other social areas. Bordaberry also proposed legislation to eliminate university autonomy and enhance the powers of the army and police.
When the Tupamaros finally renewed their armed activities following their six-month electoral truce from October 1971 to April 1972, they faced a firmly entrenched administration backed by an increasingly well-equipped and adequately prepared military, which had a blank check to defeat them. In April 1972, after a bloody shoot-out with the Tupamaros, Bordaberry declared a state of "internal war." All civil liberties were suspended, initially for thirty days but later extended by the General Assembly until 1973. On July 10, 1972, the government enacted the draconian State Security Law. By the end of the year, the army had decisively defeated the Tupamaros, whose surviving members either were imprisoned or fled into exile. Despite their victory over the Tupamaros, the military had grown impatient with civilian rule. It was now time for the armed forces' final assault on the Uruguayan polity.
In February 1973, a deep conflict emerged among the president, the General Assembly, and the armed forces. The army and air force rebelled against Bordaberry's selection of a civilian as minister of national defense. On February 9 and 10, the army issued two communiqués proposing a series of political, social, and economic measures. Initially, the navy maintained its loyalty to the president but subsequently joined the other military services. Bordaberry made an agreement with the military, known as the Boisso Lanza Pact, that guaranteed their advisory role and their participation in political decision making. In effect, the pact constituted a quasi-coup. The National Security Council (Consejo de Seguridad Nacional--Cosena) was created as an advisory body to the executive. Its members included the commanders of the army, navy, and air force, plus an additional senior military officer, and the ministers of national defense, interior, and foreign affairs.
The military then pushed for the final approval and implementation of the State Security Law. However, differences with the General Assembly, which was investigating charges of torture committed by the military and felt that the military had exceeded its powers, continued until June 27, 1973. On that date, with the backing of the armed forces, Bordaberry dissolved the General Assembly and replaced it with the Council of State, and he empowered the armed forces and police to take whatever measures were necessary to ensure normal public services. In essence, a de facto dictatorship had been announced. The new situation was supported by some Colorados (the Pachequist faction) and some Blancos (Aguerrondo's Herrerists). But the CNT called for the occupation of factories and a general strike that lasted almost two weeks. When the civil-military dictatorship was consolidated, it banned the CNT, the PCU, and other existing and alleged Marxist-Leninist organizations, and it intervened in the university to quell dissident activities by the students.
The military's "Doctrine of National Security" was a pseudoscientific analysis of society grounded in geopolitics. It posited that sovereignty no longer resided in the people but derived instead from the requirements of state survival. This was basically the same ideology made famous by the Brazilian generals after their takeover in 1964. The core of the doctrine was articulated by Brazil's General Artur Golbery do Couto e Silva in his book Geopolítica do Brasil. Essentially, the book described a world divided into two opposing blocs--the capitalist and Christian West and the communist and "atheistic" East--each with its own values that were considered irreconcilable. The Brazilian and Uruguayan generals saw themselves as part of the Western bloc and were therefore engaged in an unrelenting global struggle with the opposition. This struggle called for a war in which there was no room for hesitation or uncertainty against a cunning and ruthless enemy. Thus, it was necessary to sacrifice some secular freedoms in order to protect and preserve the state.
"Preventive" repression by the Uruguayan military regime was intense. To the dead and disappeared were added thousands of persons who went to jail because they were accused of politically motivated crimes. Many were tortured. Others were fired from their government jobs for political reasons. The regime restricted freedom of the press and association, as well as party political activity. Amnesty International calculated that in 1976 Uruguay had more political prisoners per capita than any other nation on earth. During these years, approximately 10 percent of Uruguay's population emigrated for political or economic reasons.
In June 1976, Bordaberry was forced to resign after submitting a proposal to the military calling for the elimination of political parties and the creation of a permanent dictatorship with himself as president. National elections were to be held that year, although politicians could hardly be sanguine after the assassinations in Argentina of Uruguayan political leaders Héctor Gutiérrez Ruiz (National Party) and Zelmar Michelini (Broad Front). Bordaberry was replaced by Alberto Demichelli Lizaso, president of the Council of State, who, through Institutional Act No. 1, decreed the suspension of elections. Three months later, Demichelli was succeeded by Aparicio Méndez (1976-81), who essentially decreed the political prohibition of all individuals who had participated in the 1966 and 1971 elections. Political life thus came to a halt.
In 1977 the military government made public its political plans. Over the next few years, the National Party and the Colorado Party would be purged, a new constitution would be submitted to a plebiscite, and national elections would be held with a single candidate agreed on by both parties. A charter that gave the military virtual veto power over all government policy was drawn up. In 1980 the armed forces decided to legitimize themselves by submitting this constitution to a plebiscite.
Opposing the constitutional project were Batlle Ibáñez, Ferreira, Carlos Julio Pereyra, a Herrerist faction led by Luis Alberto Lacalle de Herrera, Pachequist dissidents, and the Broad Front, who considered it authoritarian and in conflict with Uruguay's democratic tradition. When Uruguay's citizens went to the polls, they dealt the military regime a tremendous blow and rejected the proposed new constitution by 57 to 43 percent.
When the military took power in 1973, they did so in the face of a decade and a half of economic stagnation, high inflation, and increased social unrest. Massive repression brought the social unrest under control and eliminated the urban guerrilla threat. Economic policy and performance soon became the regime's ultimate claim to legitimacy and justification for its harsh rule. The military and their civilian technocrats hoped to reverse Uruguay's economic stagnation, which had led to an absence of capital accumulation and investment, as well as to capital flight. The dissolution of the General Assembly and the banning of union organizations eliminated any possibilities for action by the opposition and thus made possible a new economic model. The long-term model sought by the military involved a profound change in the traditional roles of the public and private sectors and the response of the public sector to the influence of the external market.
The military's economic program sought to transform Uruguay into an international financial center by lifting restrictions on the exchange rate; ensuring the free convertibility of the peso and foreign remittances, thus further "dollarizing" the economy; facilitating the opening of branches of foreign banks; and enacting a law to promote foreign investment. More attention was paid to the international market. The reduction of import duties, promotion of nontraditional exports, integration of trade with Argentina and Brazil, and liberalization of the agricultural and livestock markets were key goals. Although proposals were made to reduce state interventionism, the state participated actively in the preparation of the new program.
The principal architect of the program was Harvard-trained Alejandro Végh Villegas, who had served as minister of economy and finance from 1974 to 1976. Végh hoped to dismantle the protectionist structure of the economy; free the banking and financial communities from the restraints under which they operated; cut the budget, especially social spending; reduce state employment; and sell off most of the state enterprises. However, some of the nationalist and populist military leaders opposed his plan for mass reductions in government employment and divestiture of such state enterprises as ANCAP. Végh succeeded somewhat in his budgetary and monetary objectives and managed to reduce some tariffs. Between 1975 and 1980, his strict monetary policy reduced inflation from 100 percent in 1972 to 40 to 67 percent in 1980, and by 1982 it was only 20 percent. He managed this by strict control of the social service side of the budget and by a policy of depressed real wages, which fell by 50 percent during the 1970s.
Between 1974 and 1980, the gross domestic product ( GDP) grew, although unevenly. Beginning in 1980, however, the situation changed as the military's economic program began to unravel. High interest rates and recession in the United States did not help matters. Between 1981 and 1983, GDP fell some 20 percent, and unemployment rose to 17 percent. The foreign debt burden, exacerbated by the quadrupling of oil prices in 1974, grew exponentially and stood at about US$3 billion by 1984.
Industry and agriculture, whose accumulation of debt in dollars had been encouraged by official policies, were adversely affected by the government's elimination in November 1982 of its "crawling peg" system (a minidevaluation monetary policy) in effect since 1978. The progressively overvalued currency had limited the ability of domestic producers to raise prices to compete with cheaper imports. The resulting collapse of the Uruguayan new peso bankrupted thousands of individuals and businesses. Industry was in better shape, although it had unused capacity and no substantial diversification had taken place. The financial sector, which was largely foreign owned, was consolidated and expanded at the same time. As the situation deteriorated, the state, in order to save the banking system, purchased noncollectible debt portfolios of ranchers, industrialists, and importers, which were held by private banks. This adversely affected the fiscal deficit and increased the foreign debt, which grew sevenfold between 1973 and 1984.
The failure of the regime's economic model, combined with its stifling of political opposition, prompted thousands of Uruguay's best professionals to go into exile. By late 1983, Végh returned from an ambassadorship in the United States to once again become minister of economy and finance. As the most important technocrat to serve the military regime, he had returned to help smooth out the expected transition to civilian rule. He failed, however, to turn over a revived economy to a democratic government. The lack of success of the military's economic policies and their failure to achieve legitimacy or consensus led to a watering down of their own plan to reinstitute a civilian government under military tutelage.
After the electoral defeat of the military's constitution, retired Lieutenant General Gregorio Alvarez Armelino (1981-85), one of the leaders of the coup, became president, and political dialogue was slowly restored. The 1982 Political Parties Law was enacted to regulate the election of political leaders, the functioning of political conventions, and the preparation of political platforms. Its aim was the controlled regeneration and democratization of the political system, but it excluded the left to avoid a return to the situation prior to 1973. In 1982 the officials of the National Party, the Colorado Party, and the Civic Union (Unión Cívica--UC; created in 1971), a small conservative Catholic party, were elected. Once again, election results were a blow to the military. Sectors opposing the dictatorship won overwhelmingly in both traditional parties. A divided left, although officially banned, also participated: some cast blank ballots, while others believed it would be more useful to back the democratic sectors of traditional parties.
The dialogue between politicians and the military gathered momentum but was marked by advances and setbacks and accompanied by increasing civil resistance. Uruguay was now experiencing its worst economic crisis since the Great Depression. In 1983 the Interunion Workers' Assembly (or Plenum) (Plenario Intersindical de Trabajadores--PIT) reclaimed the banner of the CNT and was authorized to hold a public demonstration on May 1; it later assumed the name PIT-CNT to show its link with the earlier organization. Students--united under the Students' Social and Cultural Association for Public Education (Asociación Social y Cultural de Estudiantes de la Enseñanza Pública--ASCEEP), heir to the banned student organizations--were allowed to march through the streets of Montevideo. In November all opposition parties including the left staged a massive political rally, demanding elections with full restoration of democratic norms and without political proscriptions.
In March 1984, the PIT-CNT organized a civil strike and freed General Líber Seregni Mosquera, leader of the Broad Front, whom the military had imprisoned since January 11, 1976. By mid-1984 yet another civil strike took place, this time organized by political parties and social groups. Blanco Senator Ferreira returned from exile. His subsequent imprisonment essentially deprived the National Party of the opportunity to participate in the meetings between politicians and the military that ended with the Naval Club Pact. Signed by the armed forces and representatives from the Colorado Party, UC, and Broad Front, this pact called for national elections to be held that same year on the traditional last Sunday in November.
The discussions at the Naval Club saw the military give up its long-sought goal of a Cosena dominated by the military and with virtual veto power over all civilian government decisions. The military now settled for an advisory board that would be controlled by the president and the cabinet. Some transitional features were agreed to by the civilian leadership, mostly relating to the ability of the armed forces to maintain its seniority system in the naming of the commanders of the various military services. The military also agreed to review the cases of all political prisoners who had served at least half of their sentences. Moreover, the military acquiesced to the relegalization of the left, although the PCU remained officially banned (until March 1985). The Communists were nonetheless able to run stand-in candidates under their own list within the leftist coalition. Nothing was said about the question of human rights violations by the dictatorship.
The election results were no great surprise. With Ferreira prohibited from heading the Blanco ticket and a similar fate for Seregni of the Broad Front, and with effective use of young newcomers and a savvy media campaign, the Colorado Party won. The Colorados received 41 percent of the vote; the Blancos, 34 percent; and the Broad Front, 21 percent. The UC received 2.5 percent of the vote. Within the Broad Front's leftist coalition, social democratic Senator Hugo Batalla, who headed List 99, a faction started by Zelmar Michelini in 1971, was the big winner, garnering over 40 percent of the alliance's vote. For the victorious Colorados, former President Pacheco brought the party 25 percent of its vote. However, the Colorado presidential ticket receiving the most votes (in a system that allowed multiple candidacies for president in each party) was headed by Sanguinetti. After being sworn in as president on March 1, 1985, Sanguinetti led the transition to democracy. He did so with dignity and fairness, although the legacy of human rights violations under the dictatorship proved a troublesome problem.