groups in the 17th-century Brazilian sugar trade:
Reappraising old topics with new research insights
ISEG-Technical University of Lisbon
paper examines the role of the New Christians within Portuguese mercantile
organizations during the early modern period. It stems from the case
of the General Brazil Company, because the foundation of this enterprise
provides an example of how the 17th-century Portuguese authorities dealt
with New Christian issues, allowing for a survey of Portuguese historiography
on the subject.
Brazil Company, merchant organization, interest group activity, sugar
trade, Brazil, 17th century
In 1654, the Portuguese empire in Brazil was restored to its former size,
once the North-eastern region had been reconquered from the Dutch West
India Company. It is worth noting that the final stages of the struggle
gave the Portuguese General Brazil Company a political reward, with the
Dutch West India Company surrendering to its naval forces. Founded to
defend the Portuguese sugar fleets, and because of its receiving the monopoly
of four fundamental commodities by royal charter, the Brazil Company met
with fierce opposition in political circles, which condemned its inefficiency
in not organizing escorts with the necessary regularity. However, despite
this hostile climate, or simply because of it, after the glorious victory
over the Dutch, was able to write in an official paper from the Overseas
Council: This company that one says is harmful has conquered Pernambuco
for this crown without spending a penny from the royal treasury
(Costa 2000: p. 58).
The military effort to recover Pernambuco is one of the main subjects
of Portuguese and Brazilian historiography. The work of Evaldo Cabral
de Mello and José Antonio Gonsalves de Mello, together with Charles
Boxers ever-visible research into Portuguese colonial issues, deserves
particular mention (Boxer 1952, 1957; Mello 1987, 2000; Mello 1998). However,
the episode described above introduces other recurrent issues of Portuguese
history, perhaps most notably Portuguese backwardness. Firstly, it stresses
the formal position of , who presumably should not have been involved
in the Pernambuco revolt, whilst declaring his support for a stockholding
firm founded by royal charter to protect colonial flows, including those
from Pernambuco ports. Secondly, the Inquisition and its negative effect
on merchant welfare has turned the Brazil Company into a paradigmatic
case study. The company, thought of as an organization created by and
for New Christian interests, was a reminder of João IVs so-called
tolerance toward the New Christians, thanks to Father António Vieiras
ascendancy at the royal court. Because it was short-term, such a policy
prevented the Portuguese bourgeoisie from prospering and achieving a political
role (Torgal 1981). This is one of the most widely publicized ideas of
Portuguese historiography, from which Charles Boxer himself did not escape,
one of his articles being quoted in every study on the Company, although
the author was merely enlarging upon João Lúcio de Azevedos
work on both New Christians and António Vieira (Boxer 1949).
This paper deals with merchant groups and commercial organizations in
the Brazilian sugar trade in the seventeenth century and cannot avoid
these Portuguese historiographical topics. Rather than adopting a counter
position by reflecting on David Grant Smiths research into the role
of Old Christians in s circle of financiers (so often forgotten),
this paper examines the importance of religious or naturalizing fractures
within merchant organization (Grant Smith 1974, 1975). It questions the
significance of such symbolic and legal distinctions, not only for economic
purposes but also for political involvement. This paper seeks to stress
the role of social groups other than the New Christians, considering interest
group activity as part of a wider analytical framework, though not entirely
explored here, which has rent-seeking as its mainstream concept (Ekelund
& Tollison 1997). In many ways, it is an attempt to refresh the old
historiographical status quo by resuscitating studies that are often forgotten.
The first section summarizes the Brazil Companys creation and shows
how its royal charter clarifies what was under discussion besides the
New Christian capital guarantees. The second section relates to the structural
fracture among Portuguese and foreigners for re-exportation flows, which
helps to reappraise some organizational features that the Company had
to count on. The third section stresses the links of the Companys
directors and stockholders with foreigners residing in Portugal and with
agents abroad, forming a network of traders with both multiple regional
and social roots. This may help to clarify the relevance of certain diplomatic
agreements, such as that of 1654 between Portugal and Great Britain.
Old and New Christians in the formation of the Brazil
On 10 March 1649, a royal charter granted to one company the monopoly
rights over four essential goods ordinarily exported from Portugal to
Brazil: wine, cod, oil and flour. The monopoly represented a trade-off
of property rights, so common in early modern Europe, when the fiscal
needs of the State required this sort of agreement between the Crown and
economic interest groups. However, the Brazil Company had a particular
feature which made it distinct from the Dutch West India Company (with
whom it had to fight for the Pernambuco region) and justified its further
rights of collecting a tribute tax called avarias. It was not founded
to explore or discover new colonial areas, but rather to supply an escort
to Portuguese shipping, which means that it was founded to provide a public
good whose supply was hindered by the disastrous financial state of the
royal treasury. In this sense, the royal charter claimed to be a contract
between the King and any merchant stockholder of this company who had
been exempted from the sequestration of goods and capital by an ordinance
of 6 February, 1649.
Notwithstanding the above-mentioned clemency, the charter of 10 March
considered the Company project a business deal and not a Crown gift. What
exactly, then, was this charter? The answer differs according to ones
standpoint. No wonder, given the mismatched build-up to the foundation
of the Company. The mainstream of any analysis, however, stresses the
underground interests of the New Christians, who by then had found a remarkable
spearhead at the royal court in the person of António Vieira. Lucio
de Azevedo started a historiographical Portuguese tradition with his study
on New Christians in Portugal and presented Antonio Vieira with an irreplaceable
role. In any of his works, one will find mention of the important role
played by Antonio Vieira as João IVs Ambassador in The Hague,
helping Francisco Sousa Coutinho in peace negotiations with the Netherlands.
On one of his journeys, António Vieira established contacts with
Portuguese Jews in France, while in Portugal he had preached on behalf
of New Christian interests, underlining the need for them to return to
Portugal after the difficult period of severe persecutions launched by
the Inquisition, which had forced them to flee to European trading centers
(Azevedo 1992 [1918-1920]; 1975 ).
Given the evidence of António Vieiras special relationship
with merchant Jews, on the one hand, together with the fact that the Company
had been founded with special exemption from the sequestration of capital
and goods, on the other hand, it seems hard to criticize the intellectual
construction of Lucio de Azevedo which attributes to Vieira and his protected
New Christians the principal role in the Company project. Furthermore,
poor political relations between Jesuits and the Inquisition reinforced
this reasoning, as contended by I. Révah (Révah 1975).
It was, however, Charles Boxer and his deserved international recognition
that helped to spread Lucio de Azevedos ideas. In 1949, he wrote
the article that was to crystallize the interpretation of the factors
involved in the foundation of the Brazil Company (Boxer 1949). José
António Gonsalves de Mellos contemporary research into João
Fernandes Vieira, the leader of the Pernambuco revolt of 1645, which has
a remarkable chapter on the critical year of 1648 in the Companys
formation, would not normally have been expected to become known outside
Brazilian intellectual circles (Mello 2000 ). In fact, it took almost
twenty years for this work to become widely known, precisely thanks to
Boxer. In his short survey of Brazilian historiography in 1970, Charles
Boxer praised Gonsalves de Mellos skills as a historian, but the
time had not yet arrived to recognize the accuracy of his readings of
Father António Vieiras small role in this state of affairs
(Boxer 1973). Instead, he noted how little the history of the Brazil Company
had been improved, notwithstanding the efforts of Gustavo de Freitas (Freitas
1951). According to Boxers somewhat critical point of view, Gustavo
de Freitas had carried out good archival research but had not made much
of a contribution towards deepening our knowledge about the company. Despite
this critical review, every study of the 17th-century Brazilian economy
was condemned to quote Gustavo de Freitas article (Mauro 1983),
which, in turn, merely reproduced Boxer and Azevedos insights.
Indeed, just after Boxers article, José António Gonsalves
de Mello published a biography of the leader of the Pernambuco rebellion
against Dutch occupation. Actually, Gonsalves de Mello recognized in the
diplomatic missions of António Vieira the best evidence of his
detachment from any policy aimed at supporting the Pernambuco revolt.
Vieira and Francisco de Sousa Coutinho wished to sign a peace treaty without
delay, giving up Pernambuco, whilst the Company itself was a military
project, conceived in the meantime by the Portuguese political decision-makers,
who thought of it as a weapon against the Dutch. There were, then, two
opposite strategies. Varnhagen had already attributed this diplomatic
context to one of Vieiras pieces of Portuguese Baroque Literature,
entitled Papel Forte, in which Vieira justified the best long-term
option for giving up Pernambuco to the Dutch (Varnhagen 1871).
During this diplomatic movement of 1648, the peace treaty was being studied
by the main Portuguese political councils, who rejected the treaty, using
the arguments of Pedro Fernandes Monteiro, a political actor almost ignored
by traditional historiography, but one who became the best proxy of the
future Company stockholders at the royal court (Costa 1999). This Treasury
Councillor argued that Pernambuco could be recovered if shipping were
protected, suggesting the privatisation of defence and inviting
the King, as a common person, to become a stockholder of a proposed company.
The role played by other individuals from the Kings circle in negotiating
the contract of the Brazil Company deserved further studies. Evaldo Cabral
de Mello, republishing one of his most recent works, changed his previous
analysis, which was heavily indebted to Portuguese traditional historiography
and to its rather unfounded thesis. Digging up an example of 19th-century
Brazilian erudition, Cabral de Mello questions the role of António
Vieira and reassesses the convenience of considering other social actors
Now, if António Vieira seems definitely to have been uninvolved
in the Brazil Company and the recovery of Pernambuco, should New Christians
remain in it? The research of David Grant Smith into the group of 17th-century
Portuguese merchants should have been considered paramount in Portuguese
social historiography (Smith 1974, 1975). Inexplicably, it is rarely quoted,
with just a few exceptions (Pedreira 1995, Olival 2001, Schwartz 2003).
The reasons for the scanty acknowledgement by the Portuguese historiography
of David Grant Smiths work is not the concern of this paper, but
it has helped to solidify the rough picture that has been painted of a
merchant group and the respective upper strata being squeezed by the Inquisition,
since merchant is almost a synonym for New Christian
in Portuguese early modern historiography, although David Grant Smith
had provided evidence of Old Christian merchants in the Portuguese Restoration.
He quoted several tax farming contracts and other sorts of deals between
the State and the financial elite, who supplied the Portuguese army at
the borders of the Alentejo. He also took the most convincing step towards
identifying the social background of those who signed the Brazil Company
contract on behalf of merchant interests.
This group of stockholders, whose names are registered in the Company
charter, were not overwhelmingly New Christians. The Old Christians were
also within Dom Joãos circle of financiers and had links
with New Christians for tax farming purposes as much as they had for the
foundation of the Company. Recent research has disclosed the business
roots of this economic elite, highlighting how their Brazilian interests
were managed after the Dutch occupation of North-Eastern Brazil and how
they became involved in the sugar economy, changing shipping organization
and effecting a vertical integration of the production, shipping and trading
of sugar. Their wide-reaching geographical connections, joining Lisbon
to Porto and Viana do Castelo through several shipping partnerships during
the 1630s and early 1640s, are one of the most interesting features of
this group. Capital flows linking those three main Portuguese sugar ports
question the idea of a mercantile elite confined to Lisbons commercial
infrastructures. As for shipowning partnerships, those linking Portuguese
merchants, both Old and New Christians, with the English community in
Portugal, residing in either Lisbon or Porto, deserve special mention.
As far as this paper is concerned, the heterogeneous nature of the
upper social ranks of merchants, joining together New and Old Christians
and linking both of them to foreigners, is the most relevant conclusion
of recent research (Costa 2002). Though reaching the same conclusion,
Daviken Studnicki-Gizbert questioned the value of an economic approach
to such multicultural business organizations (Studnicki-Gizbert 2003).
Studnicki-Gizbert emphasises common cultural and moral codes as the main
cohesive factor, which would make the heterogeneity of social roots an
irrelevant feature of merchant networks, bringing to mind the classical
work of Philip Curtin (Curtin 1984). Notwithstanding the relevance of
informal institutions for the stability of merchant networks, well demonstrated
by Avner Greif and other authors who have been integrating cultural beliefs
into economic analysis inspired by the neoclassical paradigm (Greif 1994,
2000), this paper seeks to highlight proximity to the political centre
as this groups cohesive device. Sharing the same social space enhanced
the political ability to glean rental contracts, whether by promoting
economic organizations such as the Brazil Company or through the diplomatic
negotiation of exclusive colonial rights. Reciprocally, there was a political
organization that, for fiscal reasons, recognized the role of the upper
strata of merchants, reinforcing the political aspect of the link (Gauci
The heterogeneous nature of the higher ranks of 17th-century Portuguese
merchants calls for new interpretations of the royal ordinance of 6 February
1649, which exempted anyone who invested capital in a company to be created
in the near future from the sequestration of goods. The spirit of such
an ordinance suggests the existence of a capitalist group threatened by
the Inquisitions persecutions. It was, indeed, threatened. Since
the partnerships bound together New and Old Christians, any part of the
merchant group could directly or indirectly suffer the consequences of
an incident that might disturb business.
Not surprisingly, at the time when the royal councils were examining the
proposed peace treaty with the Netherlands, sent by Antonio Vieira and
the Ambassador Francisco de Sousa Coutinho, Gaspar Malheiro, one of the
most important Old Christian merchants of the Restoration period, wrote
to the King, expressing his agreement with the formation of a company
to defend the shipping of sugar. He did not forget to underline how difficult
it would be to amass the capital needed to fit out large well-armed ships.
In his paper to the King, this financier suggested the need for royal
grace and favour, remembering how fragile the group was because of the
Inquisitions persecutions. A fairly explicit suggestion was made
for an ordinance very similar to the one that would be published a few
months later on 6 February, 1649.
There is now good reason to consider the role of Old Christians in
the formation of the Brazil Company, not only because of the overwhelming
presence of this group in financial circles (remember the contract of
the Embassies with an Old Christian named Gaspar Pacheco), but also because
of their interest in a policy that would protect property rights, pressing
the King to publish the ordinance to be quoted in the Company charter.
However innovating this may sound, it was far removed from a climate of
religious tolerance. Most of all, multiple insights have shown that the
exemption policy was a deliberate short-term policy. In this case, its
purpose was to amass capital. The next year, in 1650, all the New Christians
living in the Kingdom were forced by a royal order to invest in the Company,
being threatened otherwise with the Inquisition, in a clear demonstration
of how the religious spectrum could be used for economic and political
purposes. Moreover, the promoters of this coercive policy were the stockholders
of the company themselves, including Old and New Christians, who asked
the King for help in resolving their shortage of capital. One must remember
that this specific shortage of capital for fitting out the second escort
was critical in that year because of diplomatic tensions between Portugal
and Cromwell which seriously affected the English merchant interests in
Portugal, including those who were the Companys creditors, such
as the Bushells (Mauro, 1983: 533 Shillington & Chapman 1907: 193)
Actually, the privilege of exemption from the sequestration of goods must
also be appraised in the light of alien interests, either those of the
foreigners residing in Portugal or those of the Portuguese and foreigners
living in Europe. That is why the ordinance of 6 February 1649 was to
be cited in one of the clauses of the contract between the Crown and the
group of the Company, although with one slight, yet significant, difference.
It was negotiated capital and goods freed from sequestration regardless
of religious or diplomatic motives that could legitimise it.
The group involved in the foundation of the Company foresaw diplomatic
tensions that might possibly lead to disruptions and to the ordinary sequestration
of the goods of foreigners who were considered to be subjects from unfriendly
kingdoms. This is undoubtedly evidence of interconnections between the
Portuguese merchant elite and foreigners already active in Portuguese
foreign trade. Therefore, diplomatic, and not strictly religious, concerns
widened the range of situations that needed to be legally covered by the
ordinance of 6 February by the time the Company charter came to be written.
In an article written three decades ago, Jorge Borges de Macedo took the
ordinance as a strategy for attracting foreign capital and, in particular,
for ensuring the stability of agencies abroad, considering the possibility
of the Companys seeking to integrate colonial and intra-European
flows in the same enterprise. Although the article was intended to be
just an overview of colonial and other Portuguese charter enterprises,
and not a specific study of the history of the Brazil Company, it duly
noted how rough the approaches of the exemption from sequestration could
be if confined to New Christian interests (Macedo 1979).
Such an enlarged conception of the ordinance of 6 February calls for a
re-evaluation of European markets, as well as of foreign capital in the
Companys management. The way in which investments and business interests
related the Company to foreign traders will be discussed after a description
of the active groups involved in the re-exportation of colonial goods.
Foreigners and the re-exportation of Brazilian
The analysis of the re-exportation of Brazilian sugar from the main ports
during this period of the Portuguese Restoration can only be based on
the records of the Porto customs-house. Due to the 1755 earthquake, similar
sources for Lisbon were lost.
The increasing share of taxes paid by foreigners is one of the most significant
aspects of the upward trend in re-exportations shown in Portos customs
records in the 1640s. Foreigners were already to be found in Portugal
in the 1630s (SILVA 1988). There might have been a link between migration
movements and the persecution of the New Christians, of course. In the
coastal centres of the Algarve, for instance, the growth in the English
community was the logical aftermath of the Inquisitions persecutions
(MAGALHÃES 1990, 1993). Also in Lisbon, the city government warned
the Council of Portugal several times during the 1630s about the need
to allow foreign merchants to exploit the stores left empty by the New
Christians. Immigration could help to compensate for the Portuguese lack
of merchant skills and capital. The misfortune of the New Christian traders
was a reason for the Lisbon Government to criticize royal policy and survey
the group of factors that could potentially ruin Portuguese foreign trade,
whose taxes were, in turn, one of the Crowns main financial resources.
Nevertheless, the actual roots of those involved in Portuguese-European
trade, and those active in Brazilian trade, paint a less simple picture
than that outlined by the Lisbon Governments complaints during the
Habsburg period. Firstly, New Christians might have been imprisoned or
been forced to leave Portuguese territory, although not all their relatives
would have been caught or would have fled at the same time. This selective
persecution policy, however perverse it might have been, would also have
enabled the social capital of the group to suffer less damage than that
suggested by the sum of persecuted individuals. Some families continued
to run Brazilian businesses, although they had two generations who had
been persecuted by the Inquisition. A few case studies offer evidence
of such a situation, which had particular consequences in the social reproduction
of the group (Novinsky 1972; Mello 1996; Costa 2002) Secondly, it would
have enabled those who left Portuguese cities to manage the economic flows
from Hamburg or Amsterdam, maintaining their links with members of the
group who remained in Portugal (Mauro 1970: 34).
The Inquisition did not stop its persecutions after the Portuguese Restoration.
Only the ordinance of 6 February, inserted in the Company charter, was
to have that wider result because it was read as a general order of the
King to prevent the sequestration of goods, whether the target was Company
stockholders or not. Regional differences still remained, however. The
activity of the Inquisition of Évora, for instance, does not show
such a downward trend (Coelho 2002). Nonetheless, the ordinance might
have helped to prevent business networks from being destroyed and might
have reduced the Inquisitions fierce activity, which had reached
one of its peaks around 1645, due to an anti-Semitic ideology that had
helped to fuel the Pernambuco revolt. Rebel leaders attributed the Jewish
success in Recife to the West India Companys administration of Pernambuco
(Mello 1987), finding one of the sources of legitimacy for expelling the
Dutch from there. The hatred directed towards New Christians was not really
new in the context of colonial Brazil, but it acquired a clearer shape
when the Dutch came onto the scene in South America. As Stuart Schwartz
underlined, Spanish political propaganda attributed the ease with which
the Dutch forces captured Bahia in 1624 to New Christian treason (Schwartz
How resistant the New Christian group was to political manipulation and
to the intolerance of the Inquisition is not important here, for the real
issue is the needs of those who fled to Europe because they had correspondents
in Portugal. No wonder that one of the most remarkable Portuguese Jewish
families in Amsterdam and Hamburg, Nunes da Costa, who supported the financial
demands of João IVs embassies, had an Old Christian proxy
in Porto (Swetschinsky 1980, 1981). In fact, Old Christians took a major
step forward in international business as a consequence of this process,
which created multi-religious networks for intra-European trade. Such
predatory behaviour was no different from that of a foreigner who expected
the Portuguese King to allow him to reside in Portugal seeking intervention
in colonial monopolized transactions. Multi-national partnerships would
arise, with Portuguese partners acting as spearheads for foreigners in
Brazilian business. It is rather significant that a Bahian correspondent
of English traders in Lisbon and Porto became the colonial administrator
of the Brazilian Company, revealing the usefulness of English networks
to the Companys management. The fact that the Company had the monopoly
on cod, a commodity mainly provided by English merchants, may not be of
secondary importance for explaining this predatory behaviour.
Regulation shaped the structure of the groups involved in imports from
Brazil and those active in re-exports, maintaining formal colonial business
exclusive to the Portuguese. Those few foreigners who paid taxes at the
Porto customs-house for imports of Brazilian goods overwhelmingly
sugar had shipowning partnerships with Portuguese partners. It
should be noted, however, that the group directly linked to colonial imports
was much larger than the one involved in European trade. In 1647, these
latter traders formed a group that was less than half the size of the
colonial one. So, precisely when European flows were in question, foreigners
had the principal role. However, such superiority varied according to
the market in question, in a clear demonstration of how the European market
system was, indeed, composed of many partial markets, a sort of
private market of the separate merchants (Ormrod 1984).
The Portuguese retained a good share of the re-exports of sugar to Hamburg
and France, which is a relevant feature considering that, by contrast,
the English market was shielded against the intrusion of Portuguese traders.
This seems to be a particularity of English communities abroad, who were
very successful in excluding aliens from trading with the mother country
(Klein 1984; GAUCI 2003: 68). Though an interesting topic, this is not
a main issue; rather it is worth noting that England was the principal
market for Brazilian sugar re-exports at this time.
Data for Italy, one of the significant European regions besides northern
Germany demanding Portuguese Brazilian commodities, are missing from the
records of the Porto customs-house. Perhaps because of this missing information,
(which, on the other hand, must be taken as evidence that re-exports to
Italy did not pass mainly through Porto, but through Lisbon instead),
England turned into the principal market, consuming more than 40% of re-exports
alone. Not surprisingly, English merchants became the main agents of Portos
re-exports, leading the re-export in Brazilian sugar during the 1640s
and 1650s. Even though Barbados was to change the position of Brazil in
English foreign trade, the links with Portugal and with Portuguese merchants
whether Old or New Christians remained a key business strategy
for controlling American colonial commodities. After sugar had lost its
relevance, and because the demand for Madeira and Douro wine was increasing
in American colonies, Portugal kept her place in English Atlantic trade
Such an important role for the economic relations with Portugal explains
the sensitivity of the English community to the diplomatic climate.
The Brazil Company and multinational interests
A good example of how the success of English traders in Portugal was dependent
on re-exports is given by the disruption to Anglo-Portuguese diplomatic
relations after the regicide of Charles I. His relatives, Prince Maurice
and Rupert, went to Lisbon to seek João IVs political support.
In England, Parliament had liquidated Charles Is army and Oliver
Cromwell definitely controlled the situation. João IV sided with
the royalists without considering the respective political and economic
effects. In 1650, the naval forces of Blake stood at the mouth of the
Tagus, waiting for the Brazilian fleet in order to make reprisals against
the Portuguese capital.
These episodes from revolutionary periods in both kingdoms brought Portuguese
and English interests closer together and interfered with the Brazil Company.
The English royal members in Portugal not only brought Blake to Lisbon
to damage the royalist forces and the Portuguese sugar fleet (not as well
protected by the first escort organized by the Brazil Company as it should
have been), but also jeopardized the English community in Portugal. Firstly,
João IV ordered all the English goods in Portugal and Brazil to
be sequestered. Official records of required procedures referred to Portuguese
traders in Brazil who were operating as English spearheads. A few, yet
nonetheless important, networks were disturbed by this diplomatic incident.
Secondly, part of the Companys fleet was chartered to the English
and dependent on English loans, which would be ended by involving the
Company in this sequestration. After all, the sugar fleet had sailed with
a reduced escort, making Blakes task easier, because of the Kings
orders (Costa 2002: 538, BOXER 1950, 1951).
The royal decision affected the Company managers as much as the English
community in Portugal. Blakes action resulted in the disastrous
arrival of the fleet from Rio de Janeiro, which seriously reduced the
Company revenues. On the other hand, up until 1652, when negotiations
for a peace treaty began, the diplomatic uncertainty had badly affected
English traders in Portugal, considering that they are completely absent
from customs-house records. They might have preferred to wait for a less
risky situation to restart their activity or to wait for their sequestered
capital to be rescued.
This is good evidence of how the war climate, though influenced by Blakes
superior forces, affected the welfare of English traders in Portugal and
how their business connections were part of the inner circle of the Brazil
Companys leaders. No wonder that both mercantile elites English
and Portuguese, linked by the Company became pressure groups for
a rapid signing of the peace treaty.
In fact, the Treaty was negotiated with the interference of interest groups.
Cromwell consulted the English merchants of Portugal, bringing
Edward Bushell to the negotiations, who happened to be a brother of Company
creditors residing in Portugal. On the other side, João IVs
ambassador had Thomas Maynard as an adviser. He was a merchant living
in Portugal by then, who was sent to London for diplomatic reasons. He
had started his career as a factor of one of the top English agents in
Porto and after the signing of this Treaty became the English Consul-General
in Portugal (Shaw 1998).
The 1654 Anglo-Portuguese Treaty can be read as a dictate from Cromwell,
taking advantage of the situation to force the Portuguese economic space
to open up, including the hitherto exclusive colonial domain. It can also
be seen as a device for increasing the Portuguese importation of some
types of textiles by forcing down the tax rates at Portuguese customs.
Notwithstanding the obstacles to the English imports created by customs
procedures, which in practice disrespected the tax rate fixed by the treaty,
this diplomatic agreement was a demonstration of the English vantage point
(Shaw 1998). It was not a mere contract and its context is rather different
from that of 1661. However, the point is that it was negotiated taking
into account the interests of merchants residing in Portugal and who had
investments that overlapped with those of Portuguese colonial enterprise.
The 1654 treaty highlights the fragile position of João IV as much
as the strength of the Brazil Company: the monopoly of the four commodities
was a matter of great concern and was therefore explicitly referred to
in one of the Treatys clauses. The need for peace was equally urgent
for both the English and the Portuguese merchant elite, both of whom were
close to s circle of financiers. The bargaining process for peace
brought together the very interest groups involved in preserving the specific
colonial privileges of the Company, which remained untouched despite Portugals
initial fragile position. Not surprisingly, a fraction of the English
merchants who dealt with the Portuguese market considered the prevailing
monopoly of the Company a lost opportunity to invade the Portuguese American
colony, seeking a way of getting closer to Argentinian and Spanish silver.
That is why some English voices reiterated their political opposition
to the Company managers, which, in turn, does not mean that the English
community acted as a single political block. It might have done so if
all its members had been outside the enterprises circle of financiers.
The same is also true for the New Christians, who were far from being
a single interest group.
Whilst English merchants in Portugal were waiting for the diplomatic situation
to change, disappearing temporarily from customs records between 1650
and 1652, the Company faced a shortage of capital. The situation called
for the use of the ordinance of 6 February as a device to force New Christians
to invest in the Company, as has already been mentioned above. It was
designed to force low ranking traders or New Christians out of business.
A few of them with quite an international profile did not want to invest
and were forced to do so by the Company managers. Coercive actions such
as this are evidence of scissions within the New Christians, who were
in fact critical at this political moment. It is worth noting that such
coercive measures call for a reappraisal of the Company historiography,
which previously has thought of it as an enterprise formed by and for
New Christian interests.
The documentary legacy of the Brazil Company is unfortunately lost, hindering
any research into its financial structure. Yet, notaries provide the identification
of some of the stockholders (who were registered in the royal charter
) and the recognition of their business links with English traders or
English agents, whether in Brazilian or Portuguese ports. There is also
further, even though somewhat rougher, information on Italian stockholders.
These were people claiming to have been living in Portugal long enough
to deserve symbolic social rewards, such as the insignias of Portuguese
Military Orders, proving their purity of blood. The Italian period
of the Company is contemporary with the period of English political and
diplomatic disturbance. It seems that managers turned to other international
networks to counterbalance the occasional English retirement.
It is not the aim of this paper to summarise the history of the Brazil
Company. There is no place to describe the tensions within Portuguese
political councils caused by a contract signed between the Company and
high-ranking Italian families to organize an escort for the fifth convoy.
Portuguese Overseas Council meetings referred to Esteban Paravicino and
Cardinal Mazarino as figures who were involved in a suspicious contract
with the Company. The latter was not necessarily truly involved, but the
former, indeed, sent a proxy to sign a contract with the Brazil Company
at one of the Lisbon notary offices. Italian capital guided the Companys
business choices in the mid-1650s, when Barbados began to compete with
Brazil, causing the demand for Brazilian sugar to fall sharply in what
were previously the main consumer markets. But in this contract with Paravicino,
the institutional undercover support for Italians to migrate to Brazilian
ports was understated. That is why the Overseas Council thought of any
argument, including the suspicion of conspiracy, as a way of hindering
the Italian intermission, as if Brazil were outside any national interest
other than that of the Portuguese (Costa 2002: 553-554).
In short, the history of the Brazil Company may be told in the light of
the permanent negotiation between the State and socially heterogeneous
interest groups. Foreigners, mainly Italians and English, linked to Portuguese
partners by royal privileges, were part of that history, just as in many
royally privileged organizations in early modern Europe.
The Brazil Company was, then, something other than a brilliant idea of
António Vieira to bring back New Christian capital to Portugal,
an occasionally tolerant kingdom undergoing a revolutionary process. In
turn, Portuguese merchants in the middle of the 17th century were more
than a complex group of new Christian families in difficulty because of
persecutions by the Inquisition.
In early modern Europe, group economic actors were more heterogeneous
than those that may be revealed by using single criteria for social distinctions.
17th-century Portugal was no exception. According to what has been argued
in this paper, New Christians were an important part of the game, indeed,
but not because they formed the overwhelming majority of the merchant
group. Rather because group economic actors could use that symbolic scission,
as well as other sorts of legal scissions, to acquire monopoly rents.
Actually, the history of the Brazil Company is a case study for interest
group activity and it must be reappraised under the framework of a rent-seeking
analysis, which still presents a challenge to historians of the mercantilist
period (Ekelund & Tollison 1997). Further research into interest groups
in Portuguese history should question how they used and were used by the
State, under a specific form of cost-benefit logic, through negotiations
of both property rights and monopoly privileges. Research into Portuguese
merchant organizations, expressing the politicised features of the economic
system (including diplomatic agreements), may provide new insights into
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2004, ISSN 1645-6432
e-JPH, Vol.2, number 1, Summer 2004