With preparations beginning officially on 18 September 1937, senior military officers used the Cohen Plan, a fraudulent document, to provoke the National Congress into declaring a state of war.

The cabinet expressed approval for the new corporatist constitution, and a radio address by Vargas proclaimed the new regime, the Estado Novo (New State).

[3] In response, Minas Gerais formed the Liberal Alliance with the states of Rio Grande do Sul and Paraíba to counter the move, nominating Getúlio Vargas for the presidency in the upcoming 1930 general election.

[7] The paulistas, people from São Paulo, instigated a brief civil war between 9 July to 2 October 1932—the Constitutionalist Revolution—but failed to defeat the federal government.

[a] The former was created on 24 January 1936, acting independently as an investigatory agency with an effective director who once told Vargas that making one or more unjust arrests was preferable to allowing Brazil to experience another communist insurrection.

[34] According to historian Richard Bourne, "Although [Oliveira] was objectively an opposition candidate, he began a kind of decorous campaign, speaking to businessmen rather than the public at large and trying to minimize any offence to the Federal Government.

[39] With the presidential elections, political debates emerged, suppressive measures were lifted, and the minister of justice Macedo Soares [pt] ordered 300 prisoners released.

[43] The interventor and governor of Rio Grande do Sul, Flores da Cunha [pt], who had been against the President,[44] now found Vargas trying to circumscribe his influence.

The President increased the power of the federal military commander in Rio Grande do Sul in an attempt to contest Cunha's armed strength.

[32] Rumors surfaced that Vargas was preparing to cancel elections, and journalist[47] Maciel Filho described the atmosphere in mid-September, writing: "Getúlio's strength merits a golpe (coup) to end this foolishness.

"[48] Vargas's need to remove Cunha from power paved the way for the cancellation of elections, and the nullification of the federal system, and led to the planning of a new constitution and what would become the Estado Novo (New State).

With the accession of Pedro Aurélio de Góis Monteiro to Army Chief of Staff in July 1937 and the removal of opposing officers in command, Vargas was under increased military pressure to either act in favor of them or be deposed.

They established a consensus that the potential for another communist uprising, coupled with the lackluster laws defending the country, warranted the military's support of a presidential coup.

[52] With advice from Monteiro, Francisco Campos, who admired European fascism and corporatism and was anti-liberal and anti-communist,[53][54] was working clandestinely on a new, corporative constitution for Vargas.

On 30 September, however, Dutra, on the Hora do Brasil radio program, publicly revealed a communist document—the Cohen Plan—detailing a violent revolution with rape, massacres, pillaging, and church burnings, and called for a new state of war.

[42] Integralist Captain Olímpio Mourão Filho, chief of AIB propaganda,[56] was caught at the Ministry of War creating a plan for a potential communist uprising.

[42][55][56][59] On 1 October 1937, the day after the document's revelation, the petrified Congress convened overnight to declare a state of war and suspend constitutional liberties and rights.

[42][60][61] Vargas and the military paid a visit to the graves of those killed in 1935 by communists, saying "Let this pilgrimage be a lesson and a warning", adding that "the armed forces are on the alert in the country's defense".

Archbishop Dom João Becker transmitted the news to Cunha, who went into exile in Montevideo, Uruguay, on 18 October, leaving a farewell speech to his state.

[69] Dutra, Monteiro, and General Cavalcanti all agreed that the new regime would carry on provisionally until a national plebiscite, detailed in the new constitution, was held.

Word of Lima's visit had spread in early November, so, to deter the press, Vargas said this was an inquiry into the states' opinions for a substitute presidential candidate.

The moderate minister of justice, Macedo Soares, who had been trying to save democracy, resigned from the cabinet[d] on 8 November, after falling on the wrong side of the anti-communists; Campos replaced him the next day.

[73] On the morning of 10 November 1937, cavalry of the Federal District police force surrounded the Congress and blockaded the entrance, preventing congressmen from entering.

The sole dissident, Odilón Braga, the minister of agriculture, resigned immediately and was replaced by anti-Oliveira paulista Fernando Costa [pt].

[78] In a radio broadcast, Vargas claimed the political climate "remains restricted to the simple processes of electoral seduction", that political parties lacked ideology, that legislative delay prevented the promises made in the April 1934 presidential message, including a penal code and a mining code, and that regional caudilhos (strongmen) had flourished.

[54] Instead, he presented a new program of activity, including new roads and railways into the Brazilian hinterland and the implementation of "a great steelworks" that was to provide local minerals and offer employment.

Oliveira was held in Minas Gerais for six months under house arrest, later being exiled in November 1938 to live in France, New York City, Buenos Aires, and Santiago before returning to Brazil to die in May 1945.

[85] Levine labels the new government as authoritarian, writing "Vargas, in spite of his tough caudilho ability to deal with personalities around him, held little talent for totalitarian dictatorship in the strict sense of the word.

[91] After a series of democratic openings toward the end of World War II, however, an increasingly uneasy military worried that Vargas would interrupt democracy again and stay in power via a coup similar to the 1937 one.

According to Caffery's description of events, the presidential campaign threatened a crisis; Vargas was unable to reach an agreement with the Bahia and Pernambuco governors for another candidate (in reference to Vargas's cover story for Lima's visit to the Northeast); a plebiscite would be held for the new constitution, replacing the weak 1934 constitution; the government would adhere to a "very liberal policy with respect to foreign capital and foreigners who have legitimate interests in Brazil".