A History of Spain and Portugal
Vol. 2
Stanley G. Payne

Chapter 27
Portugal under the Salazar Regime

[663] In Portugal, the parliamentary Republic gave way to a conservative, authoritarian Republic through a simple pronunciamiento followed by seven years of institutional change. There was no apocalyptic civil war as in Spain, and the ultimate leader of the new regime was a university professor, not a generalissimo. The move to the right came ten years earlier in Portugal, and in part because of the absence of such clear and almost total polarization as in Spain, the new authoritarian system developed in a framework of institutional continuity. This was the easier because political mobilization and participation in Portugal had been minimal compared with Spain; Portugal had still not experienced mass movements.

The military coup of May 1926 took advantage of the disgruntlement with the dominant liberal elites felt in highly diverse sectors of society. At the time, it was by no means clear that the pronunciamiento had put an end to the liberal parliamentary system. The revolt was supported by most of the army but lacked ideological consistency or clear planning. It was in general a "popular" coup in that the majority of politically conscious elements not associated with the governing group at first accepted it. Forces ranging from the moderate left to the extreme right hoped to benefit from the shift in power, and newspapers of widely varying tendencies hailed the new government.

[664] On June 2, 1926, two days after the coup succeeded, Bernardino Machado resigned the presidency to Mendes Cabeçadas, the sometime Republican naval officer (and antimonarchist conspirator of 1910) who had initiated the revolt. Within a few weeks, however, Cabeçadas was shouldered out by the military for not being sufficiently "apolitical." He was replaced as president and prime minister by General Gomes da Costa, Portugal's prime war hero, veteran of African campaigns and commander of the Portuguese Expeditionary Corps in the World War. Gomes da Costa was, however, in many ways but a simple soldier, subject to amnesia from the fevers contracted in Africa and uncertain in his leadership. Within twenty days he was replaced by General António Oscar de Fragoso Carmona, a senior administrative officer who had led the revolt in southern Portugal.

The new regime had no grand design but set out to govern "apolitically," promising to restore order and establish efficiency and economy in government. Strikes were outlawed and controls were placed on firearms; parliament was dissolved and censorship imposed. The reaction finally occurred in February 1927, when leftists and former Democrats rebelled in Lisbon and Porto. The struggle lasted several days and cost 160 lives before it was put down. This resulted in further tightening of the military regime. Carmona was elected president of the Republic for a special five-year term in a plebiscite held in March 1927. He was then replaced as prime minister by another officer, Col. José Vicente de Freitas.

Of the two main problems facing the dictatorship, public order and public finance, the former was at least being precariously maintained against a multiplicity of petty conspiracies and several more small, sputtering revolts. Yet the financial problems grew worse because of the lack of technical ability of the military regime and the destructive effects of several new manipulative devices. When they applied for a foreign loan, the regime's leaders were astounded to find that Portugal's government and finances were held in such low esteem that the same terms exacted of defeated countries such as Austria and Hungary--international control of part of state finance--would be demanded of them. After it was formed, the Freitas government saw little alternative to turning over state finance to the leading conservative in the field, a professor of political economy at the University of Coimbra named António de Oliveira Salazar.

Born in 1889, Salazar came from a rural lower-middle-class family in northeastern Portugal. He studied in a seminary during his youth but later turned to law and economics. A lifelong bachelor, austere and ascetic in his personal life, Salazar was a pious Catholic and one of the leaders in the Centre Académico da Democracia Crista [665] (CADC), a movement of the Catholic intelligentsia founded in 1910. It followed the doctrines of Leo XIII and was more concerned with defending Catholic interests than with promoting democracy. The CADC was strictly practical on the issue of regimes; from the beginning of his academic career Salazar had made it clear that what was needed was a different spirit in public affairs and a new form of civic tutelage rather than a change of regime per se. Elected as one of the three CADC deputies in the 1921 parliament, he resigned his seat after one session in disgust over the corruption and ineptitude of the assembly. During the next five years Salazar began to make a name for himself in conservative circles as a financial expert, and was made finance minister in the dictatorship's first government of June 1926. At that time he found that little could be done without drastic change, and resigned when the regime refused to give him full veto power over financial measures. His recall in 1928 was a recognition of the ineffectuality of the military regime and the overriding need for strong, competent direction of finance. In 1928 Salazar was granted the full veto power over finance that he had demanded earlier, and within a year he managed to balance the budget, at least on paper, and eliminate the floating debt. Public employees were reduced in number and expenditures in most branches of state administration significantly lowered. Taxes were raised slightly, the efficiency of their collection and administration much improved, and strict controls placed on credit and foreign trade. By the beginning of 1930 Salazar had become the indispensable strong man of the government.

Three and a half years after its inception the Portuguese regime was uncertain and divided over the course it should pursue. Collapse of the Primo de Rivera government in Spain raised new doubts about the future of the Portuguese dictatorship. Its original minimal program had been more or less completed, but what lay beyond that was uncertain. Some of the military favored continuation of a sort of military dictatorship with a corporate social and economic system in the fashion of Italy and Spain; others preferred a more strongly institutionalized presidential republic that could return to normalcy. The CADC had always had a doctrine of Catholic corporatism, and the first leaders of the regime had mentioned a corporate form of organization in their earliest announcements. The monarchist minority was divided between constitutionalists and authoritarians, the main expression of the latter being the radical Integralismo Lusitano, modeled on the Action Française and with considerable support in the universities, particularly Coimbra, and among the intelligentsia. The arbiter of the regime was its president, General Carmona, who showed himself not lacking in political talent as he maneuvered among sectors of the military and their civilian supporters. The gov- [666] ernment had been reorganized under yet another general, Ivens Ferraz, in mid-1929, but after internal disagreement led to its breakdown at the beginning of 1930 the new prime minister, Gen. Domingos Oliveira, formed a cabinet that represented an almost complete victory for Salazar's policies.

Opposition centered on three aspects of the regime, the political, economic, and religious. All the more liberal elements opposed continuation of authoritarian rule; vocal elements among the lower classes and some business leaders were restive about the financial restrictions that raised the cost of some staples and tended to discourage new production and expansion; anticlericals both within the army and among civilians resented the relaxation of all forms of restriction against Catholicism on which Salazar had insisted. In addition, many officers resented the great influence of a civilian minister on a military regime. However Carmona, a Catholic, had gone along with Salazar on nearly all the key issues, while balancing intradictatorship internal politics between monarchists and republicans, clericals and anticlericals. On the basis of Salazar's ideas and policies and Carmona's political arbitration, the dictatorship finally began to take doctrinal and institutional form, as defined by Salazar in key speeches of May 28 and July 30, 1930. He indicated that the regime would create a corporate republic based on a strong state. Such a system would transcend military dictatorship, and grounded in patriotic unity and the moral doctrines of Catholic corporatism, provide cooperation and stability without indulging in the glorification of authoritarian rule found in Fascist Italy or Bolshevist Russia. An amorphous political organization, the National Union, was then formed along the lines of Primo de Rivera's late Patriotic Union, to provide semiorganized citizen support for the regime.

Antigovernment conspiracies and revolts persisted. A plot by the Democrats and other groups was aborted in mid-1930, but Madeira, the Azores, and Portuguese Guinea were held briefly by military rebels in April 1931. An uprising in Lisbon in August 1931, the twenty-third antigovernment revolt (not counting minor conspiracies and bombings) in twenty-one years, cost eighty lives before it was put down.

One of the great strengths of the dictatorship lay in the fact that most Portuguese opinion was weary of politics and after the vicissitudes of two decades was largely willing to accept a regime that could bring peace and stability. Despite the pressure which his financial policies placed on much of the population, especially the lower classes, Salazar pursued his program with little deterrence, completing the balancing of state finances and the stabilization of Portuguese currency. In July 1932 his tutelage of the government finally became [667] official when he replaced the ailing Domingos Oliveira as prime minister. The way had been cleared for the institutionalization of the Portuguese "New State."

The new Portuguese constitution of 1933 was anounced as the "first corporate constitution in the world," which in a formal sense it was. It provided for a president elected for a seven-year term by an electorate of literate adult males or males paying at least 100 escudos annually in taxes, as well as literate adult women who either paid 200 escudos in taxes or had a secondary education. This meant an electorate of slightly more than 1,200,000 in a country of 7,000,000. The president held authority to appoint the prime minister, as well as the rest of the cabinet on the prime minister's recommendation, and the government was made responsible to the president, not the national assembly. The national assembly was to be composed of 120 deputies chosen for a term of four years. Both the government and the assembly had the right to initiate legislation, but the assembly could not initiate measures that required new expenditure or that reduced state income. Civil governors of the eighteen provincial districts and heads of municipal councils were to be named by the central executive, as they had been under the constitutional monarchy. Finally, the constitution of the New State provided for the selection of a consultative "Corporate Chamber" in lieu of a senate, chosen by cultural and professional associations and economic groups. This constitution represented Salazar's concept of a system of order and stability that would foster the established national interests without adopting overt statism or formal authoritarianism. Some have noted that the new charter bore a strong resemblance to the original corporative doctrine first defined by the Catholic Union of Fribourg in 1884. After a plebiscite in March 1933 it was announced that 60 percent of the eligible voters had cast ballots in favor of the new constitution.

Establishment of the Estado Novo constitution was met by a successful military and civilian revolt in Madeira and the Azores which spread almost immediately to Cape Verde and the west African possessions. Though it was snuffed out in Africa, it was sustained for a month in the Atlantic islands, until finally put down by a special expedition from the mainland. By that time the only formidable rivals of Salazar's leadership were several potentially dissident groups in the military, some of whom felt that the army did not enjoy sufficient influence or reward under the New State. A minor attempt at military revolt in August 1933 led to reorganization of the cabinet; a subsequent petty mutiny at Bragança in October was probably motivated by liberal conspiratorial residues in the military.

By the time that the New State was inaugurated, the old circles of lower-middle-class radicalism had become disheartened and disartic- [668] ulated. The other remaining opposition lay in the clandestine labor movements: the syndicalist CGT, dominated by the Portuguese anarchist FARP; the socialist FOP (Portuguese Worker Federation); and the small Communist Inter-Syndical Commission. The labor system of the new state was defined by the National Labor Statute of September 1933 that reaffirmed the ban on strikes (and lockouts), formed workers into official syndicates, regulated their activities, and defined their legal and bargaining relationship with the "guilds" of employers that were to be organized. The statute was more directly influenced by the Italian Fascist system than was the constitution and was aimed mainly at workers in the cities, who were more troublesome. The response was an attempt at general strike and insurrection on January 18, 1934, carried out mainly by the anarcho-syndicalists, that enjoyed fleeting success only at Coimbra. Events were precipitated by Communist terrorism, and though the Communists refused to cooperate with the anarcho-syndicalists in the main insurrection, the whole effort was labeled bolshevist and led to renewed, more effective repression.

Formation of the New State and suppression of the left opened the question of the internal politics of the regime; political organizations had not arisen to fill the void left by the elimination of the old groups. A variety of small nationalist societies and youth groups had been formed in recent years, but the National Union had not taken effective shape and the roots of the liberal cliques and local liberal notables survived in sectors of Portuguese society. The most serious of the new nationalist groups was the National Syndicalist movement, founded in 1932 and to become the principal exponent of Portuguese fascism. The National Syndicalists were led by former Integralists who had moved in a radical direction in their stress on social issues and the lower classes. Their head, Rolão Preto, was known to be a friend of Salazar, and the movement burgeoned under the apparent benevolence of the regime. As the most dynamic and "modern" of the nationalist groups its support grew rapidly; by 1934 the National Syndicalist leaders claimed 50,000 members--a number which if valid would have represented a major mobilization in Portugal--and eighteen newspapers, as well as the support of several hundred army officers. Like their Spanish counterparts, the National Syndicalists adopted the blue shirt as their insignia and touted their social fascism as the logical goal of a modern authoritarian nationalist regime. Thus the Blue Shirts threatened the leadership, goals, and equilibrium of the New State within a year of its founding.

Salazar finally took action in June 1934, exiling Preto and purging the Blue Shirt leadership. On the following July 29 Salazar denounced the National Syndicalists as "inspired by certain foreign models" and [669] singled out their "exaltation of youth, and the cult of force through direct action, the principle of the superiority of state political power in social life, [and] the propensity for organizing masses behind a single leader" (1) as fundamental differences between fascism and the Catholic corporatism of the New State. Soon afterward the remaining National Syndicalists announced their dissolution as a separate party in order to incorporate themselves into the government's National Union. Elections under the new constitution were then held in December 1934 without opposition of any kind, and Carmona was subsequently reelected to a formal seven-year term as president, his moderating functions now having been almost entirely assumed by Salazar. In March 1935, after reports of new conspiracies by Masonic groups, all secret societies were outlawed in Portugal. The final anti-climactic round in the consolidation of the regime occurred in September 1935, when a few hard-core National Syndicalists, a small group of disgruntled army officers, and a handful of anarcho-syndicalists attempted an armed revolt in Lisbon that was easily crushed.

Salazar faced his first major problem in foreign affairs with the outbreak of the Spanish Civil War. Till that time official relations between the Portuguese authoritarian state and the Spanish Republic had been quite correct, though the latter permitted its leftist associates to assist efforts at overthrow of the former and the former permitted Spanish rightists to live and operate on Portuguese territory. The Portuguese government immediately grasped what was at stake in the Spanish contest and had every reason to fear the long-range consequences of a victory for the revolutionary left. Within little more than a week it agreed to cooperate with the Spanish insurgents; Portuguese transportation and communications facilities were vital in the Nationalist war effort. Nonetheless, Salazar adhered to the international nonintervention agreement, having no intention of making Portugal a belligerent and recognizing that nonintervention was a convenient diplomatic device for avoiding further complications. Subsequently, a contingent of Portuguese enlisted in the Nationalist forces. At the end of the war the government announced that there had been 18,000 volunteers and more than 8,000 casualties. Conversely, in September 1936 the crews of two small Portuguese warships mutinied and tried to join the Spanish left.

The Spanish war resulted in a radicalization of the Portuguese regime. Though Salazar declared his opposition to all the "grand heresies" of the contemporary world, including nazism and fascism as well as communism and materialism, new security and mobilization measures were carried out. In September 1936 the regime announced [670] creation of a Portuguese Legion, trained by reserve army officers, as a special auxiliary militia system. Soon afterward a general youth organization, the Mocidade, was established on a compulsory basis to train all school children through university years in civic discipline and extracurricular activity, though it was never extended to the entire school population. A loyalty oath was introduced for state employees, and a purge was conducted in the civil service and universities, discharging employees of doubtful reliability. For the first time in the history of the regime an official state culture and propaganda agency was established. The response of the opposition was a bomb that exploded some ten feet from Salazar on July 4, 1937, deafening his chauffeur but leaving its target unharmed.

From the beginning of the Spanish war, the Portuguese government alone of all powers save the Soviet Union made it perfectly clear which side it supported. Though Franco's regime was not officially recognized, on December 1937 Salazar sent a special delegate to the Nationalist government and at the close of the war signed a treaty of friendship with it. At the same time the historic alliance with Britain was retained, and as the danger of war with Germany increased, the British government made clear its acceptance of the "independent" position of the Portuguese state.

Salazar was careful to avoid involvement in the outbreak and development of the Second World War. In 1937 official relations had been broken with Czechoslovakia, but only after the Czech government had for political reasons forced cancellation of an arms contract negotiated by Czech industry. Salazar shared Franco's dismay over the German invasion of Poland; after the fall of France, the two peninsular governments added an additional protocol in July 1940 to their treaty of friendship and nonagression, providing for mutual consultation to preserve their independence and integrity. Unlike Spain, Portugal never felt real pressure to enter the war. The British alliance, from the vantage point of neutrality, gave Portugal a special relationship to the allied powers that was also of help to Spain. In September 1943 Salazar granted Britain and the United States the use of military bases in the Azores, and in 1944 finally curtailed shipment of certain strategic materials, mainly wolfram, to Germany. The two remaining Far Eastern possessions, Macau and Timor, were both occupied by Japan in 1942 but recovered at war's end. After the conclusion of the conflict, the Portuguese regime was made a target of the international Communist "antifascist" campaign, along with Spain, Argentina, Sweden, and Switzerland. However, retention of the form of a republican parliamentary system stood the regime in good stead, and pressure against Portugal never became extreme.

One major internal problem that was finally regulated during the [671] war years was that of religion, settled by an official concordat with the Vatican in 1940. Republican separation of church and state was maintained, but the state restored nearly all privileges enjoyed by the church under the monarchy, including educational and moral jurisdiction and financial support. This completed the process of reaffirmation of Catholicism begun by the government in 1928 and in religious society by the Fátima experience of 1917. It reversed the anticlerical and eventually anti-Catholic trend of Portuguese history from 1760 to 1925.

In October 1945 Salazar announced a drastic liberalization program designed to make Portugal appear in step with the democratic swing of events in the immediate postwar period. These measures included a general political amnesty, restoration of press freedom, curtailment of legal repression, and a promised introduction of the right of habeas corpus. Parliamentary elections were announced, and the opposition formed a broad Movement of Democratic Unity based in Porto with participation that ranged from ultra-Catholics and fringe elements of the extreme right all the way to the Portuguese Communist party. The nominal list of electors, however, was tightly controlled by the government, which announced that some 900,000 people were eligible to vote, a decrease of 25 percent since 1933 in an expanding population. The opposition then withdrew and boycotted the elections, in which the government announced that 56 percent of registered voters cast their ballots for the official ticket. Restrictions that had been temporarily lifted were then increasingly reimposed. The regime easily put down a minor military revolt in October 1946, but the Lisbon dockworkers' strike of April 1947 proved more difficult to handle and was accompanied by unrest in the armed forces. A potentially far-reaching plot uncovered in the military command involved both liberals and monarchists; six general officers were imprisoned, including the aging Mendes Cabeçadas, who had played a major role in the overthrow of the two preceding regimes in 1910 and 1926.

Despite the essentially authoritarian character of the regime, Portugal, unlike Spain, was accepted into both the Marshall Plan (1947-1948) and the North Atlantic Treaty Organization (1949). As a member, it did what it could to secure the admission of Spain to NATO, but to no avail. The first direct shipments of Marshall Plan aid did not reach Portugal until 1950.

During the principal years of the Cold War there was no fundamental change in the nature or structure of the Estado Novo. An opposition candidate, the elderly liberal Gen. Norton de Matos, stood against Carmona for the first time in the presidential election of 1949 but withdrew before the balloting on the grounds of repression and [672] discrimination. Carmona died in 1951 and was succeeded as president by Gen. Craveiro Lopes, a man closely tied to the regime and a former commander of Portuguese volunteers in the Spanish Civil War. Censorship was maintained save for a brief thirty-day period before each election, and all but a tiny handful of opposition candidates invariably withdrew before balloting began. The major exception occurred in the presidential election of 1958. Salazar and other top figures were dissatisfied with Craveiro Lopes's tenure as president, because of his willingness to tolerate pressures for liberalization. He was replaced as government (National Union) candidate by the reliable naval minister, Admiral Américo Tomás. The opposition candidate was an emotional, quixotic former government collaborator, Gen. Humberto Delgado, who refused to withdraw despite efforts at repression, and according to official announcement received one-fourth of the approximately one million votes cast. In 1959, a year after Tomás's election, the choice of the president was switched from direct elections to indirect selection by the two parliamentary bodies and representatives of provincial municipal councils.

The Legion was maintained as an elite militia of the regime. It was given naval and air arms, was placed in charge of civil defense, and later received counterinsurgency training. As a special force recruited on the basis of political qualification, it was considered a more reliable instrument of the regime than the semi-autonomous army. The youth organization, the Mocidade, was limited to children between seven and fourteen (excluding some of the rural areas), but continued to receive special perquisites, including a modicum of political instruction and some paramilitary training for older boys.

The basic goal of the regime was depoliticization, which was the more easily achieved since most of the people had never become politically conscious anyway. Hence the joke about the diversion of Portuguese interest toward the "three Fs": Fátima, football, and fado. Opposition, such as it was, remained limited to small groups of students and intellectuals and a handful of middle class activists and military men.

Repression was efficiently handled by security forces, the three most important of which were the secret police (PIDE), the urban police (PSP), and the Guarda Nacional Republicana, converted into a rural constabulary along the lines of the Spanish Civil Guard. Between 1948 and 1959 the annual number of prosecutions for illicit political activity oscillated between 700 and 2,000.

[673] Social and Economic Development

The social structure of Portugal has changed more slowly than that of any other west European country save perhaps Ireland, but population increase in the twentieth century has been rapid:
1900 5,423,000
1920 6,032,991
1930 6,825,883
1940 7,722,152
1950 8,441,312 (incl. 584,399 in the islands)
1970 9,800,000 (approx.)

The rate of population growth in the middle decades was greater than that of Spain, explained in part by the peace and continuity in Portuguese society. Though infant mortality in Portugal was cut in half between 1920 and 1960, neither the birth rate nor the death rate has dropped as rapidly as in other west European countries: 
Portuguese birth rate per 1,000 Death rate per 1,000
1900 31.0 20.3
1920 32.2 22.8
1940 24.6 16.1
1950 24.8 12.6
1958 23.6 10.2

Figures in both categories are higher in the islands than in mainland Portugal.

The illiteracy rates remained the highest in Europe outside parts of the Balkans. Illiteracy among those above seven years of age declined through the following levels: 
1911 70 percent
1920 66
1930 61
1940 49
1950 40

 By 1970 it was estimated to be a little more than 15 percent.

Agriculture, the base of the Portuguese economy and society, changed very little during the first generation of the Estado Novo. The strength of the Portuguese rural economy has always been that its poverty is, at least in the northern half of the country, an evenly distributed poverty. Though the proportion of land held in large estates of more than 100 hectares is approximately the same as in Spain--roughly 50 percent--the proportion of Portuguese farmland owned in small properties of 10 hectares and less is one and a quarter times greater in Portugal than in Spain (32.2 percent compared with 14.73 percent). This distribution of property, combined with traditional culture and the absence of new ideas, had been the foundation of the stability and quiescence of the apolitical peasantry. Hence the regime has been eager to protect the structure of rural society, showing little inclination to expose it to the effects of rapid change or development.

[674] Table 33. Portuguese Farm Properties by Categories of Size, c. 1960

Size in hectares Percent of all farms Percent of all farm area
Up to 10 94.9 32.2
Over 10 but less than 200 4.8 28.7
Over 200 .3 39.0
Source: Relatorio Final Preparatorio do II Plano de Fomento, vol. 2, in V. X. Pintado, Structure and Growth of the Portuguese Economy (EFTA, 1964), p. 63.

 As of 1952-1954 there were 853,568 agricultural units in Portugal, divided into the following categories of exploitation: 
Farmed by owner 525,335
Rented 131,320
Share-cropped 28,134
Mixed 168,779

The fractionalization of agrarian cultivation units is impressive, as indicated in table 34. A law of 1926 prohibited subdivision of any property of less than one hectare, but subdivision of only slightly larger properties has continued steadily, and table 34 if anything is incomplete. The actual number of landholders is, however, considerably smaller than the number of cultivation units, as indicated in table 35.

Between 1874 and 1957, land under cultivation increased approximately 50 percent, from 4,598,500 to 6,630,000 hectares. The latter figure represents approximately three-quarters of the 8,906,000 hectares of land in Portugal, but 40 percent (or about 2,500,000 hectares) is partially productive forest land. Only 668,000 hectares are classified as completely unfit for any productive use. As in the nineteenth century, most of the land brought into new use lies in central and southern Portugal, and the extension of cultivation has been most notable in wheat, vineyards, and olives.

[675] Table 34. Size of Portuguese Cultivation Units in Hectares

Size of unit No. of properties
to .25 130,038
.25-.5 112,554
.51-1. 157,877
1.1-3. 238,519
3.1-5 68,914
5.1-10 52,921
10.1-20 22,872
20.1-50 10,874
50.1-100 3,047
100.1-200 1,506
200.1-500 1,182
500.1-1000 500
1000.1-2500 276
2500.1-5000 61
5000.1-10,000 8
10,000.1-20,000 3
Source: Albert Pasquier, L'Economie du Portugal (Paris, 1962), p. 72.

Table 35. Dispersion of Portuguese Agricultural Properties, 1952-1954
No. of holdings in farm Percent of all landowners
1 24.2
2 noncontiguous 15.3
3-5 noncontiguous 28.2
6-10 noncontiguous 18.7
11-20 noncontiguous 9.6
more than 20 noncontiguous 4.0
Source: INE, Inquérito às Exploraçoes Agrícolas do Continente, vol. 3, in Pintado, p. 64.  

In 1950 the distribution between the employment sectors of both the Spanish and Portuguese economies resembled those of France nearly 80 years earlier. Since 1950, employment in the primary sector has declined rapidly in both countries and at approximately the same rate. According to government statistics, employment of the Portuguese labor force has changed as follows: 
Sector 1940 1950 1960 1970
Primary 49.3 48.4 42.8 29.8
Secondary 20.4 24.9 29.5 36.7
Tertiary 30.3 26.7 27.7 33.5

The financial policies of the first decade of the regime bore heavily [676] on the lower classes, temporarily decreasing the standard of living and probably hampering Portuguese production. As indicated earlier, the autonomous trade unions were eventually broken up after 1926 and replaced by official syndicates. State syndical regulations were promulgated in 1933, but syndicates were not organized for all branches of urban labor until the end of the decade. At best they would have affected only a minority of the population, for in 1940 only 25 percent of the Portuguese people lived in cities of 10,000 or more inhabitants. For most of the lower classes--rural laborers and dwarfholders--the regime planned local "Casas do Povo" in each rural district to set up savings accounts and administer insurance benefits. By 1959 there were 319 syndicates with 894,845 members, but only 570 rural Casas do Povo with 480,000 members. Though a total of 45 percent of the active population was enrolled by that time, this included only about 20 percent of the rural population.

By 1959, 501 employers' guilds had been organized: 234 in agriculture, 169 in commerce, and 43 in industry. In most branches of enterprise guilds were not compulsory, and none had been formed in either textiles or metallurgy; the Estado Novo was for a long time a corporative state without full state economic corporations. The first full corporations to coordinate employers' guilds and workers' syndicates were not organized until 1956.

In 1945, neutral Portugal presented a pleasant and in some respects prosperous-looking contrast to most of devastated Europe. Without war damage and with foreign credits earned by shipments to belligerent powers, the country was in the most favorable economic position vis-a-vis western Europe that it had seen in many generations. This did not survive long into the postwar period. By the early 1950s, with the recovery of western Europe under way (including even, to some extent, Spain), it became clear that the real gap between the Portuguese and west European norm had not been reduced. Industrial production had made up only 31 percent of the Portuguese gross national product in 1938 and rose very slowly to 33.7 in 1953 (at which time the corresponding figure in France was nearly 45 percent). 

Table 36. Expansion of Cultivated Area by Products, Portugal, 1874-1957 (in hectares)
1874 1957
Wheat 260,000 814,000
Corn 520,000 483,000
Rice 7,000 37,000
Vineyard 204,000 360,000
Olives 200,000 420,000
Oak groves 370,000 1,000,000
Pine groves 210,000 1,170,000
Source: Virginia Rau, Estudos de história económica (Lisbon, 1961), p. 30.
[677] Table 37. General Index, of Portuguese Industrial Production, 1933-1962
1933 43 1947 80 1952 101 1957 137 1960 172
1943 60 1948 88 1953 100 1958 147 1961 186
1944 62 1949 84 1954 111 1959 155 1962 192
1945 65 1950 91 1955 119
1946 75 1951 102 1956 130
Source: Pintado, p. 164.
Table 38. Portuguese Economic Growth, 1962-1969
(1963 = 100)
1962 1964 1965 1966 1967 1968 1969
General Industrial Index 92 112 119 127 134 142 154
Mining 115 96 101 102 112 115 106
Manufacturing 92 112 119 127 135 143 154
Electricity 89 111 108 130 138 143 157
Agriculture 95 - - 88 99 98 91
Source: United Nations Statistical Yearbook, 1970.

Consequently in 1953 the Portuguese government adopted its first official plan for national economic development, embracing the six years 1953-1958. It emphasized development of basic facilities (such as electric power) and relied largely on domestic financing, stipulating that 60 percent of new investment would be provided by public capital. The plan stimulated industrial growth to the rate of 8 percent a year but fell short of its goals in agriculture. The second six-year plan, for 1959-1964, stressed industry and recruited 25 percent of its capital from abroad, maintaining the same industrial growth rate on a slightly more sophisticated plane. The third, or interim, plan, covering only the years 1965-1967, emphasized producing for export, while the fourth development plan for 1968-1973 returned to the stress on industrial expansion.

Portuguese industry sustained a commendable growth rate through the 1960s, as indicated in tables 37 and 38. The gross national income and real wages for workers and farm laborers also increased considerably. Between 1961 and 1967 the rise in real wages for industrial workers was approximately 4 percent a year and that for farm laborers even more.

Nevertheless the Portuguese growth rate was considerably below that of Spain, with its greater resources and broader market. Portuguese per capita income, despite recent increases, has remained about one-quarter lower than the Spanish and is still far and away the poorest in western Europe. As in Spain, economic expansion is not yet sufficient to absorb population increase and the results of social and technological transformation.

[678] Table 39. Economic Growth in Portugal Compared with Other South European Nations
GNP per capita Rate of growth of GNP
1961 1938-58 1953-57
Portugal $301 3.0 4.5
Spain 303 3.3 6.0
South Italy 305 - 4.1
Greece 435 1.2 6.9
Turkey 210 3.5 2.6
Yugoslavia 266 4.4 10.5
Rates of Investment as Percentage of GNP
1952-56 1957-61 1952-61
Portugal 14.5 17.7 16.3
Spain 15.6 17.5 16.6
South Italy 24.2 24.6 24.5
Greece 14.6 17.6 16.3
Turkey 13.6 14.6 14.3
Yugoslavia 27.5 28.6 28.2
Source: Pintado, pp. 14, 19, 22,

As in Spain and most other developing countries, agriculture has been neglected and continues to do poorly. Though there has been a steady increase in mechanization, this is not directly reflected in a proportionate rise in productivity. Agricultural production declined in 1958-1959, and rose at a rate of less than 1 percent a year for the entire period of the first two plans. During the mid-1960s it remained static.

Portuguese industry and finance have become increasingly concentrated, as is true in most developing economies. By 1959, 45 percent of the industrial labor force still worked in shops with 10 or fewer employees, but 44 percent worked in plants with more than 100 employees each. Moreover, the top 1 percent of all enterprises in industry and services earned 42 percent of the income in those sectors, while the small firms making up 83 percent of all enterprises earned less than 11 percent. The six largest banks held approximately 60 percent of Portuguese deposits and credit.

[679] Table 40. Rates of Change of Personal Consumption, 1950-1960 
Annual rate of growth in percentages Ratio of 

column 1 

to column 2

Per capita consumption Per capita GNP
Czechoslovakia 1.24 4.3 .28
Poland 3.00 3.0 1.00
Hungary 3.10 3.5 .89
France 3.06 3.4 .90
Greece 3.99 5.27 .76
Italy 3.56 5.15 .70
Portugal (1952-60) 3.24 3.02 1.07
West Germany 6.49 6.05 1.07
United States 4.61 1.17 1.38
Source: V. Holesovsky, "Personal Consumption in Czechoslovakia, Hungary and Poland, 1950-1960: A Comparison," Slavic Review 24, no. 4 (Dec., 1968): 622-35.

As noted in table 40, the ratio of consumption to production was comparatively high in the Portuguese economy during the 1950s and 60s. Though the distribution of consumption has been somewhat less egalitarian than in certain other west European countries, this nonetheless indicates a not inconsiderable diversion of national income to the lower classes. A weak economy presumably cannot do otherwise if it is to maintain the most minimal subsistance level, yet this also results in a slower rate of investment. Another feature of the Portuguese system lightening somewhat the burden of the lower classes is that it has had a nominally more progressive tax structure than the three larger countries of southwestern Europe. By 1960, 35.7 percent of Portuguese state income was derived from direct taxes, compared with only 27.5 percent in France.

During the second half of the Salazar era there was increased investment in education. By the 1960s schools, for the first time in Portuguese history, became available for nearly all children, though a very small minority were still unprovided for. By 1970 illiteracy was estimated at slightly more than 15 percent, and less than 8 percent among adults under forty.

One of the most remarkable things about contemporary Portuguese society is the extent to which, despite population growth and [680] economic development, it has remained basically rural. As recently as 1950 over half the workers in industry and construction lived in very small country towns with fewer than 2,000 inhabitants. Since then the rate of urbanization has increased, but only slowly when compared with other countries. By 1958 only 16.4 percent of all Portuguese lived in genuine cities, of 20,000 or more, whereas 39.8 percent of Spain's population lived in cities.

Portuguese rural society has produced a steady population surplus for the past century, but the bulk of it has emigrated overseas rather than moved to the cities. Since 1945 nearly one million people have left Portugal, and the rate of departure has accelerated since 1961. Only 22 percent of all rural migrants during the decade 1950-1960 moved to Portuguese cities. Most have sought cheap industrial jobs in France and other advanced west European countries; it has been said that by 1970 the greater Paris district had the third, or even the second, largest Portuguese urban population in Europe. After Porto, the largest Portuguese urban concentration under Portuguese dominion is found in the Angolan capital of Luanda.

Recent Portuguese history and social structure have shown a greater continuity than those of any other country in Europe. As Herminio Martins has written,

Thus the Salazar regime has managed to implement its leader's insistence upon conservation and continuity. Portuguese social structure since 1930 has been altered comparatively less than that of any other European country. Only one new major source of pressure has emerged in recent years, the rebellion in the African territories.
Portuguese Africa

The expansion and tightening of Portuguese control in Africa is not merely a product of the Estado Novo but has its roots in the late Republican period. Though the Republican government had made an effort to decentralize government in the overseas territories, its main [681] accomplishment was to regularize administration and place each major territory under its own high commissioner, who dominated local affairs much more thoroughly than before. An example was the most important high commissioner of early twentieth century Angola, Gen. José Norton de Matos (Salazar's later adversary for the government leadership), who administered the region from 1921 to 1923. It was during his regime that the local press and political groups were brought under tight government control. It was also under the Republic that the requirement of the caderneta (labor notebook) for each native worker was fully developed. Angola in particular was wracked by persistent petty revolts between 1910 and 1922. Pacification of inland Angola and Moçambique was not completed until the mid-1930s, and during that period the nineteenth-century ideal of potential Portuguese citizenship for the African population was given up.

By 1929 a clear line had been drawn between the indigenato, or native population, and the tiny minority of assimilados literate in Portuguese. The subsequent Colonial Act of 1930 recategorized the overseas as colonies instead of the provinces they had been up to that time, though a later measure of 1951 changed the classification to overseas provinces. The original goal of the Estado Novo was to make Portuguese Africa self-sufficient and eliminate the drain on the central budget. A small amount of foreign capital was attracted, but the pace of development was slow. Output of raw materials and agrarian exports, particularly in Angola, began to increase rapidly only after 1945 with the great expansion of coffee production. In 1950 only 30,000 of the more than 4,000,000 native inhabitants of Angola had become assimilados, and by the end of that decade schools had been provided for no more than 10 percent of the children. Portuguese immigration had increased considerably but was still less than 5 percent of the population in Angola and only about 2 percent in Moçambique. Portuguese Africa seemed at first untouched by the movement toward independence in other colonial regions, but an increase in minor disorders during the late 1950s led to a tightening of security.

The storm finally broke in 1961 when armed revolt erupted in northwestern Angola. There was considerable opinion in the Portuguese government in favor of avoiding further complications by pulling out as Britain, France, and Belgium had done elsewhere. Salazar, however, stood firm, though he had to quell an incipient military revolt to do so. Reinforcements were rushed to Angola, and the insurgency was confined to one tribal group in the northwest. Meanwhile the Indian government seized the opportunity to occupy Goa and the last remaining Portuguese possessions on the Indian coast. [682] There were native insurrections in Portuguese Guinea in 1962 and in Moçambique in 1964. The communist and third-world blocs mustered all their propaganda resources against the Portuguese regime. In 1965 the Security Council of the United Nations (to which Portugal had been admitted nine years earlier) demanded that Portugal grant independence to its African territories, and the General Assembly urged that diplomatic and commercial relations with Portugal be severed. Subsequently, one of the two remaining Portuguese outposts in east Asia, Macau, was made a virtual protectorate by China in 1967.

Through this tempest the Portuguese government made clear its determination to stand fast in Africa. Officially it was argued that Portugal had never been racist but had always encouraged assimilation and miscegenation, which was partly but not fully true. Beyond Portugal's "mission," leaders of the regime felt that the shock of losing the remainder of the empire would be too severe for the system to survive at home. Major reforms were undertaken in Portuguese Africa in 1961-1962. Equal rights were established nominally for the entire native population, and forced contract labor was abolished. Schools and sanitary facilities were improved and economic development speeded up. It could soon be demonstrated that living standards in Angola were higher than in most surrounding independent African states; meanwhile the growth of Angola's coffee and diamond production and the discovery of oil increased the economic desirability of holding firm.

It is difficult to measure the cost of Portuguese policy. By 1970 few more than 200,000 of 4,800,000 inhabitants of Angola were Portuguese, in Mozambique only 130,000 of 6,600,000, and in Guinea only a handful out of 500,000. In recent years more than 100,000 Portuguese troops have been regularly deployed in counterinsurgency, not counting tens of thousands of native auxiliaries. Portugal has borne a heavier burden of military service than any other west European country. Throughout the history of the regime, the armed forces have taken nearly 40 percent of the budget, but the figure has increased somewhat in recent years and may amount to 7 percent or more of the gross national income of Portugal. Only the firm control of the government in Lisbon, supported by a definite sentiment of nationalist determination among some of the home population, has made the effort possible. Thus the revolts in Angola and Mozambique have been largely contained, though the one in Guinea has been more successful, dominating at least half the countryside in the least important of the three Portuguese African territories.

[683] The Demise of Salazar and the Continuity of the Regime

In September 1968 a chair collapsed under the seventy-nine-year-old Salazar, who fell heavily, later suffering a stroke that left him in a coma for months. (He did not die until over a year later.) The president, Admiral Tomás, temporarily took over the government, and appointed as the new prime minister Dr. Marcello Caetano, an internationally known jurist and scholar who had held numerous state administrative positions and was considered the leader of the "liberals" within the regime. In 1958 Caetano had been dismissed from the key post of administrative minister of the presidency for being too "advanced," and in 1962 had resigned the rectorship of the University of Lisbon in protest against police intervention. As leader of Portugal in the post-Salazar transition, he proposed to guide the country into a phase of accelerated development and of discreet liberalization. In his first speech to the nation on September 27, 1968, Caetano declared that "fidelity to the doctrine brilliantly taught by Dr. Salazar should not be confused with obstinate attachment to formulas or solutions which he once might have adopted." (3)

Under Caetano the Portuguese regime has maintained its basic structure and policies. There is, however, greater emphasis on rapid expansion, and Caetano's cabinet, like the contemporary government of Franco in Spain, includes a high proportion of so-called technocrats. Police repression was eased considerably, and the opposition enjoyed greater freedom in the elections of October 1969 than at any time in more than thirty-five years. Approximately 62.4 percent of nearly 1,700,000 registered voters participated, and the two main opposition groups won about 12 percent of the votes cast. Nonetheless, the opposition remained weak, divided, and in no position to contest the strength of the government.

Two main question marks were left for the future: the outcome of the African struggle and the direction of internal development. Despite the domestic growth of the 1960s, the Portuguese government could hardly rest secure while the country continued to register at the bottom in nearly all categories of west European social and economic statistics.

 Bibliography for Chapter 27

[711] The best account of Salazar and his policies is Hugh Kay, Salazar and Modern Portugal (New York, 1960). An excellent brief analysis of the structure of the regime will be found in H. Martins, "Portugal," in S. J. Woolf, ed., European Fascism (New York, 1969), 302-36. Of recent brief descriptive books the most balanced is Pierre Debray, Le Portugal entre deux révolutions (Paris, 1963). The best economic study is Albert Pasquier, L'Economie du Portugal (Paris, 1962), but see also V. Xavier Pintado, Structure and Growth of the Portuguese Economy (EFTA, 1964). Ralph von Gersdorff, Portugals finanzen (Bielefeld, 1961) is a semi-official account. Paul Descamps, Le Portugal: La Vie sociale actuelle (Paris, 1935), provides a detailed description of Portuguese society as of the early 1930s. Ludwig Renard, Salazar, Kirche und Staat in Portugual (Essen, 1968), presents a juridical account of the legal terms of church-state relations.

During the past decade and more, most of the ink spilt on Portuguese affairs has dealt with Portuguese Africa. The only detailed and reliable book on contemporary Angola is D. Wheeler and R. Pélissier, Angola (London, 1971). There is a brief general survey by Ronald H. Chilcote, Portuguese Africa (Englewood Cliffs, N.J., 1967). The Portuguese position is given in F. C. C. Egerton's Angola in Perspective (London, 1957); Dr. Franco Nogueira, Portugal and the United Nations (London, 1964); Hélio Felgas, Guerra em Angola (Lisbon, 1961) and Os movimentos terroristas de Angola, Guiné, Moçambique (Influência externa) (Lisbon, 1966); and Mugur Valahu, Angola clé de l'Afrique (Paris, 1966).

Notes for Chapter 27

1. Jacques Ploncard d'Assac, Salazar (Paris, 1967), p. 107.

2. H. Martins, "Portugal," in Contemporary Europe: Class Status and Power, ed. M. S. Archer and S. Giner (London, 1971), p. 84.

3. Hugh Kay, Salazar and Modern Portugal (New York, 1970), p. 418.