1938, January 1st:
Government
- Brazilian leaders continue to seek greater production efficiency through a more Hawkish stance. Vargas makes no changes in his cabinet: Political commentators are divided over whether this reflects satisfaction with the current group or a fear of the turmoil any changes would cause.
Industry
- Although Brazilian politics are highly unstable, our industrial rating has improved substantially. Argentina has pulled ahead of us, true, but we hope to make good that gap eventually.
Technology
- Brazilian Army, Airforce, and Navy leaders have all had opportunities to develop more modern methods of war-making. Brazil is now capable of fielding fast, heavy cavalry formations, an affordable combination of speed and power that we have great hopes for. Our airforce and navy are less well-served, but this will change.
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Itamaraty technical experts persuade the British to release data on "Mechanized Agriculture". The United Kingdom and the other Great Powers have a tremendous scientific lead over us; we need to ramp up our efforts if we are to contribute much to the Allies.
International Affairs
- Spain and China are far away from Brazil, Argentina merely wishes to match us diplomatically, and Germany is friendly, peaceful, and an important trading partner. There is clearly no reason to increase spending on weapons or troops; keeping up in research will be sufficient.
1938, January-February:
- As the new year begins, Japanese forces have advanced deep into China, crossing both the Yellow and the Yangtze, and overrunning both the plains of Henan and the hills and forests of coastal Fuxian. Action currently focuses on a daring drive by Imperial forces to the gates of China's new capital of Chongqing, but China is preparing a counterblow that will temporarily liberate much of Jiangxi in the south-east.
1938, Winter-Spring:
- Chamberlain is proving to be at least as possessive of British secrets as was Baldwin. Brazilian scientists learn much from their British colleagues, but only through very considerable diplomatic persuasion (mostly in the form of rare materials). We are forced to prioritize: Basic Battleship, Advanced Machine Tools, and Basic Fighter are all we could afford.
- Brazil's diplomats of
Itamaratyset up small trade agreements with France, Canada, South Africa, and Australia to win friends and influence people. Now serving a democratic nation, their efforts will eventually raise relations with all other democratic trading partners to +200.
1938, January 4th:
- President Justo of Argentina delivers an impassioned speech today to a huge rally in Buenos Aires, claiming parts of Chile and Great Britain, half of Paraguay, and the entirety of Uruguay as once and future Argentine possessions. He lambastes both the UK and Brazil as "Twin shackles on the strong rising peoples of South America."
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Itamaraty wastes no time in warning the southern South American nations of the danger posed by the "New Rosas" and the "Would-be Platine Emperor". A war of cartoons rages between Argentinean and Brazilian newspapers, each portraying the leaders of the other nation as, respectively, lackeys of the Anglo-American Jewish-plutocratic conspiracy, and vicious piranhas with swastika-shaped teeth and gun-barrel fins. Amusing although all this is to the public, underneath the laughter there is sudden unease. Eyes turn to Europe ... and Hitler.
1938, March 3rd:
- Austrian Nazis seize control of Vienna! In flagrant violation of both international and bilateral agreements, German troops march into the country; Hitler proclaims the
Anschluss (unification) of his homeland with Germany. The forces available to Germany rise dramatically. This sudden demonstration of Nazi ambitions to reshape the map of central Europe impels Great Britain and France to hasten their rearmament. Canada, Australia, South Africa, New Zealand, and Brazil are less immediately affected.
1938, March:
- Canny Brazilian commodities traders funded by secret
Itamaraty funds establish an effective monopoly on the valuable trade in Coal between the United States and Japan, reaping a small but welcome profit.
1938, April 23rd:
- Chamberlain announces a new policy of more generous technological assistance to bolster Allied strength. Brazil is an early beneficiary.
1938, April-May:
- Shady maneuvers and well-distributed cash gets
Itamaraty considerable influence over American oil exports. Profits from reselling the "black gold" to the highest bidder are ... considerable.
- Instability in the American economy (of unknown origin) cause American cash shipments to again be suddenly canceled; again, we raise our bid to obtain renewed supplies. We plunder their natural resources; they shut off our funding...We just love each other. Really.
Our cheerful wheeler-dealers present a report on their current activity (report does not include the small trades to make friends):
1938, early June:
- A Brazilian Navy poor in doctrinal talent taps Epaminondas dos Santos to lead its research into carrier-based airpower.