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In this position he played a key role, along with President Vargas and General Góis Monteiro in the establishment of the dictatorship of the Estado Novo on November 10 1937 and the repression of the uprising of local fascists in May 1938. He remained as Minister of War until leaving office to contest the presidential election of 1945.
During World War II he was among the Brazilian military leaders who were opposed to alignment with the allies and the country's deeper involvement in the conflict. With Brazil's participation in the war on the Allied side and the growing pressure from civil society for democratization of the country, Dutra formally gave his support to the ending of the Vargas regime that had begun in 1930. He participated in the deposition of Vargas in October 1945, continuing the interventionist doctrine practiced at the time by the Brazilian army.
The following month Vargas announced his support for Dutra, the army's candidate, at the expense of the air force candidate, Eduardo Gomes, in the ensuing presidential elections.