A representative of the so-called "milk coffee policy" and the last years of the First Brazilian Republic, Bernardes ruled the country almost continuously under a state of emergency, supported by the political class, rural and urban oligarchies, and high-ranking officers of the Armed Forces against a series of tenentist military revolts.

At the end of 1924, the government expelled São Paulo politicians from the direction of the country's economy, abandoned federal support for the protection of coffee and began a contractionary and recessive policy, which achieved its goals of containing inflation and exchange rates at the expense of contracting industrial output.

With a majority in Congress, the government enacted labour laws, introduced income tax, instituted the right of reply in the press and facilitated complaints against journalists for slander and defamation, included moral and civic education in the schools' curricula and revised the 1891 Constitution with a centralizing amendment.

[2][3] The Brazilian economy in 1922 was growing,[4] but suffered from high inflation, a devalued currency,[a] eroded tax revenue and low international coffee prices, Brazil's main export product.

However, the candidate was elected, was recognized, took office, ruled and handed over the Nation's fate to his substitutes.Bernardes' candidacy manifesto focused on economic issues, with three goals: budget balance, currency valorization and the creation of an independent central bank.

Equilibrium in the trade balance would come from the permanent protection of coffee, the increase in other exports, such as cotton, and import substitution, especially through the development of coal production and the industrialization of iron deposits in Minas Gerais.

[21] Bernardes' ideological foundations were Minas Gerais-style developmentalism along the lines of João Pinheiro's administration (1906–1908),[22] the nationalist and authoritarian criticisms of liberalism,[23] a strong Executive and a voluntarist and dirigiste State, in order to produce a conservative modernization.

São Paulo native Rafael de Abreu Sampaio Vidal took over the Ministry of Finance,[25] ensuring his state's control over the country's economic policy — a typical "milk coffee" agreement.

His name displeased orthodox politicians from Minas Gerais: Antônio Carlos Ribeiro de Andrada, leader of the majority in the Chamber of Deputies, Mário Brant and Afonso Pena Júnior.

[45] O Globo accused the presidential group of having used censorship in favour of its private interests, such as the ban on reporting sugar prices on the international market, protecting businesses owned by the president's friends.

The charge on global income, established in December 1922, was promoted by Antônio Carlos Ribeiro de Andrada, president of the Chamber of Deputies' Finance Committee and budget rapporteur.

[71] On 24 January, Bernardes enacted the so-called Eloy Chaves Law, which established pension and retirement funds for railway workers[72] and is considered the origin of social security in Brazil.

[99] Its proponents argued that there was full freedom for discussion, while opponents considered it absurd to debate the proposal in the midst of a state of emergency, with newspapers suffering criminal prosecutions and journalists being arrested and attacked.

[111] Shortly before, on the 14th, the Pact of Pedras Altas was signed in Rio Grande do Sul, which ended the war and granted amnesty to the revolutionaries, guaranteed room for the opposition in the Assembly and Congress, and kept Borges de Medeiros in his positions, but prohibited his re-election.

Epitácio Pessoa had paid for the importation of machinery, equipment and cement for the construction of dams and roads in the region, which did not please either São Paulo coffee growers or the local oligarchs.

Minister Miguel Calmon and senator Lago sent a telegram to the state's Public Force and the countryside colonels to vote for Góis, and Bernardes asked Horácio de Matos for support.

[138] The measures taken in Rio de Janeiro and Bahia have already been analysed as a moment of decadence or transformation of the "Governors' Policy", in which the federal government, in exchange for support in Congress, did not intervene in the internal politics of the states.

La Nación, from Buenos Aires, and El Mercurio, from Santiago, noted the good reception of the report in the trading of Brazilian bonds on the London and New York stock exchanges.

Later, the manifesto of the rebellious leader João Francisco Pereira de Souza directly attacked the report, in addition to the increase given to congressmen's salaries while the army suffered cuts.

[157] Planned as a rapid blow, which would occupy the city in a few hours and then march to Rio de Janeiro, the uprising degenerated into urban combat in central São Paulo,[158][159] with scenes reminiscent of the First World War.

[206][207] The Italian diplomatic mission visited Brazil and three other South American countries, Argentina, Chile and Uruguay, to represent Benito Mussolini's regime to the respective governments and the diaspora.

[209] The country's image was eroded by the contrast between internal authoritarianism and active participation in the League of Nations, where Brazilian diplomats worked on issues such as the distribution of passports to refugees and ethnic minorities.

[214] Direction of the country's economic policy took a turn at the end of 1924:[215] in November[216] the federal government abandoned the defence of coffee, leaving the task to the states (especially São Paulo),[217][218] and on 27 December Sampaio Vidal and Cincinato Braga were dismissed and replaced by Aníbal Freire, from Pernambuco, at the Ministry of Finance, and James Darcy, from Rio Grande do Sul, at the Bank of Brazil.

[243] The year also began with the recent transformation of two remote and isolated places into political prisons: the oceanic island of Trindade and the Cleveland Agricultural Centre, on Brazil's border with French Guiana.

[273] At the beginning of 1926, the Prestes Column crossed Ceará, Rio Grande do Norte, Paraíba and Pernambuco, reaching the border with Bahia, on the banks of the São Francisco River, on 25 February.

[284] In a letter to Luís Carlos Prestes, Father Cícero Romão Batista recognized the patriotism of the rebellion, but recommended its surrender: "you must still reflect on widowhood and orphanhood which, with penalizing abundance, spread everywhere".

Mário de Lacerda, 2nd Auxiliary Police Chief, was appointed by the criminal Guimarães das Linhas, in favour of whom he protected the clubs and large societies that hosted gambling.

Fontoura retaliated with a letter to the president, with copies given to newspapers, in which he refused the "generous offer he [Bernardes] made to me of a commission in Europe as a reward for the services I rendered to the country".

From May to June of the following year, having proven its fiscal and monetary discipline, the Brazilian government obtained a loan of 60 million US dollars from Dillon Read bankers, from New York, to pay off the Treasury's debts and provide the Bank of Brazil with international reserves.

[347] Historian Pedro Calmon praised the reform for breaking the "rigidity of the liberal Constitution of 1891, giving it a modern, social democratic flavor", despite the bad occasion, carrying it out "in a closed environment, without the enthusiasm of debates and the diversity of ideas".