Villela the political economy of money and banking in imperial brazil, 1850–1889 (2020)

PALGRAVE STUDIES IN THE HISTORY OF FINANCE The Political Economy of Money and Banking in Imperial Brazil, 1850–1889 André A.Villela Palgrave Studies in the History of Finance Series Editors D’Maris Coffman Bartlett Faculty of Built Environment University College London London, UK Tony K. Moore ICMA Centre, Henley Business School University of Reading Reading, UK Martin Allen Department of Coins and Medals, Fitzwilliam Museum University of Cambridge Cambridge, UK Sophus Reinert Harvard Business School Cambridge, MA, USA The study of the history of financial institutions, markets, instruments and concepts is vital if we are to understand the role played by finance today At the same time, the methodologies developed by finance academics can provide a new perspective for historical studies Palgrave Studies in the History of Finance is a multi-disciplinary effort to emphasise the role played by finance in the past, and what lessons historical experiences have for us It presents original research, in both authored monographs and edited collections, from historians, finance academics and economists, as well as financial practitioners More information about this series at http://www.palgrave.com/gp/series/14583 André A. Villela The Political Economy of Money and Banking in Imperial Brazil, 1850–1889 André A. Villela Escola Brasileira de Economia e Finanỗas Fundaỗóo Getulio Vargas Rio de Janeiro, Rio de Janeiro, Brazil ISSN 2662-5164     ISSN 2662-5172 (electronic) Palgrave Studies in the History of Finance ISBN 978-3-030-32773-6    ISBN 978-3-030-32774-3 (eBook) https://doi.org/10.1007/978-3-030-32774-3 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the ­publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and ­institutional affiliations Cover illustration: © duncan1890 / DigitalVision Vectors / Getty Images This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland For my parents, Annibal and Heloisa Preface This book owes its existence, in some measure, to chance In May 2018, I received an email from Ruth Noble, assistant editor in the Finance division at Palgrave Macmillan, asking me if I could evaluate a book proposal that had just been submitted to them The topic of the proposed book was banking houses in nineteenth-century Brazil, the very same casas bancárias that I had encountered over twenty years ago while doing research for my PhD thesis on monetary and banking policy in imperial Brazil As the topic itself interested me and, additionally, little is known as yet about the activities of these banking houses—although contemporaries and historians alike are in no doubt as to their importance to the Brazilian economy at the time—I did not hesitate in accepting the invitation to write a brief evaluation of the manuscript Shortly after sending back my report, Ruth Noble popped the question: ‘Would you be interested in writing a book for our Palgrave Studies in the History of Finance series?’ My gut reaction at the time was to reply “no” Indeed, for the past few months I had been working on a short piece to be included in a larger volume co-organized with colleagues, but nothing remotely resembling a manuscript for a full-sized book It then occurred to me that, actually, I did have some old material that could potentially be transformed into a book—my PhD thesis, presented in 1999 to the Department of Economic History of the London School of Economics and titled “The Political Economy of Money and Banking in Imperial Brazil, 1850–1870” Parts of the thesis had come out as articles in academic journals in Brazil, but the opportunity to publish a revised vii viii  PREFACE version of the complete manuscript through such a prestigious house as Palgrave Macmillan was an altogether different (and exciting) proposition After explaining to Ruth how my own doctoral research on commercial banks and monetary policy in mid-nineteenth-century Brazil differed from (and dovetailed into) the proposal that I had just finished evaluating for Palgrave Macmillan, I submitted a formal outline of the manuscript to the editors In the following weeks, I received inputs from three anonymous scholars invited by Palgrave to look into my book proposal It would be fair to say that, on average, their assessment was positive Still, they (rightly) insisted on an adaptation of the original academic text to the new medium (a book) and, in one case, suggested that I extend the original time frame of my research from 1850–70 to the end on the imperial period, that is, to 1889 The first suggestion was straightforward and inescapable, but the second one gave me second thoughts about the whole endeavor After all, at that point in time I did not see myself going back to the archives and libraries in the time left over after completing my tasks as lecturer in and Head of the undergraduate program in Economics at FGV/EPGE (Fundaỗóo Getulio Vargas/Escola Brasileira de Economia e Finanỗas) Further consideration and a desire to close a chapter in my intellectual and professional life prodded me on, however I therefore accepted the challenge and submitted a revised proposal, to which Palgrave Macmillan gave the go-ahead Informing my decision to embark on a project that I knew would occupy my free time for the next six months (in the end, due to delays of my own making, it was more like nine) was the conviction that the book would be an excellent opportunity to revisit my first major academic achievement after two decades of reading, teaching, and doing research on topics linked to the macroeconomic history of Brazil In a sense, it would be a different, more seasoned, author covering the same topic that had attracted me at a younger age Furthermore, it dawned on me that the “new” period that an extension of the original time frame entailed (i.e., 1870–89) had already been covered by several talented scholars I could (and did), therefore, rely on a fairly large body of secondary literature consisting of high-level academic output, including PhD dissertations, and complemented it with material gleaned from a host of primary sources that are currently (but, lamentably, not twenty years ago) available online The latter includes, to name but the most important, the entire collection of the priceless annual reports  PREFACE  ix presented by Ministers of Finance to Parliament (Relatorio Ministerio da Fazenda), the annals of the debates held in both the Chamber of Deputies and the imperial Senate, the reports on two of the major commercial crises to hit Brazil in the nineteenth century (in 1857 and 1864), and a number of classic books and contemporary newspapers The final product is the book you have in your hands It is an abridged, extended, and revised version of my doctoral dissertation This apparent oxymoron is easily explainable The book’s length is approximately one-­ quarter shorter than my thesis, in part due to the editor’s limits on the number of words (80,000, as opposed to the 100,000 words—I think— the University of London imposed on its PhD candidates) The historical period covered by the manuscript, as already indicated, extends to the fall of the monarchy, in 1889 The process of covering more historical ground over a smaller number of pages forced me to revise thoroughly the original text Along the way, I was led to prune several parts that seemed less vital to my main arguments or were, plainly, obscure to me twenty years after they had been originally written Other passages that now appeared somewhat rough-edged were dully polished, rendering the prose (I hope) clearer to the reader Finally, I included new material, not only in Chap (which covers the 1870–89 years), but also elsewhere, having benefited, as noted, from academic contributions made over the past two decades As for the content of the book, its title is self-explanatory The pages that follow both present and analyze the conduct of monetary and banking policy during part of the Brazilian Second Reign, in the second half of the nineteenth century Lest an anachronistic use of the term be conveyed to the reader, monetary policy is employed throughout the book as a shorthand for the mounting legislative corpus and policy measures undertaken at the time and which dealt with different aspects related to the issue of currency (not only notes and metallic coins, but also other forms of script), including the chartering and operation of issuing banks For students of Brazilian history specifically, the book’s “selling points” are manifold Economists and economic historians will find, I hope, detailed material on a crucial dimension in the formation and functioning of a market economy—monetary policy I am well aware of previous monetary histories of Brazil and have made use of this literature throughout the book What sets the present monograph apart, I believe, is the richer detail provided here, combining monetary and political history, as well as an attempt to identify possible rationales behind the recurrent policy shifts in the monetary and banking realms throughout the period x  PREFACE In discussing the constraints, domestic and external, under which contemporary policymakers operated and which involved issues of not only a more materialistic nature but also ideology, it is hoped the book will be of interest to a public that goes beyond the community of experts on the economic history of Brazil Students of macroeconomic history—especially those working on the development experiences of export-oriented economies gradually integrating into the evolving classical globalization of the time—should find here material worthy of comparative exercises with other countries’ experiences Likewise, questions relating to the constitution of private banks entrusted with “proto central bank” functions, as discussed in the book in connection with the early experience of the third Bank of Brazil, are bound to attract scholars working on the early history of monetary authorities and state building more generally Finally, those whose interests lie in exchange-rate history and the relative merits of a fixed-exchange-rate regime (including the gold standard) versus a floating one may gain new insights when looking at Brazil’s rich experience in the period under study here Rio de Janeiro, Brazil André A. Villela 198  A A VILLELA Sweigart, Joseph E 1987 Coffee Factorage and the Emergence of a Brazilian Capital Market, 1850–1888 New York: Garland Publishing Villela, André A 2000 Brazil in Mid-Empire: The Council of State and the Banking Question, 1850–1870 Estudos Economicos 30 (4): 629–651  Appendix Table A1  Total notes outstanding, by issuer: 1854–6 (in contos) Bank of Brazil Year Treasury % Head office % Branches 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866 46,692.8 46,692.8 45,692.8 43,676.7 41,664.6 40,700.6 37,599.9 35,108.4 33,323.6 30,594.4 29,094.4 28,090.9 28,900.9 75.0 68.9 53.3 44.7 45.0 42.4 42.0 42.8 43.3 37.5 29.2 25.8 25.5 15,530.7 21,062.9 27,488.2 33,175.0 22,125.5 21,889.8 22,626.3 18,131.9 20,152.4 27,297.3 43,168.0 43,767.6 42,902.4 25.0 31.1 32.0 34.0 23.9 22.8 25.3 22.1 26.2 33.4 43.4 40.2 37.8 – – 12,609.1 20,860.9 19,811.3 18,972.1 16,189.9 15,258.2 18,556.0 19,654.6 23,270.5 34,154.4 39,197.6 % Other banks % Total – – – 62,223.5 – – – 67,755.7 14.7 – – 85,790.1 2.3 – – 97,712.6 21.4 8967.7 9.7 92,569.1 19.7 14,510.7 15.1 96,073.2 18.1 13,038.7 14.6 89,454.8 18.6 13,513.1 16.5 82,011.6 24.1 4843.0 6.3 76,875.0 24.1 4115.6 5.0 81,661.9 23.4 4030.8 4.0 99,563.7 31.4 2853.3 2.6 108,866.2 34.5 2480.5 2.2 113,481.4 Sources: Treasury notes in Legislaỗóo sobre Papel Moeda (1923) Bank notes in RMF, various issues Note: Figures are for end of year © The Author(s) 2020 A A Villela, The Political Economy of Money and Banking in Imperial Brazil, 1850–1889, Palgrave Studies in the History of Finance, https://doi.org/10.1007/978-3-030-32774-3 199 200  APPENDIX Table A2  Brazilian banks of issue and their main accounts, 1850–9 (in contos) Year/Bank 1850 Banco Commercial Rio Banco Commercial Bahia Banco Commercial Maranhão 1851 Banco Commercial Rio Banco Commercial Bahia Banco Commercial Maranhão Bank of Brazil (Mauá) 1852 Banco Commercial Rio Banco Commercial Bahia Banco Commercial Maranhão Bank of Brazil (Mauá) Banco Commercial Pernambuco 1853 Banco Commercial Rio Banco Commercial Bahia Banco Commercial Maranhão Bank of Brazil (Mauá) Banco Commercial Pernambuco 1854 Banco Commercial Bahia Banco Commercial Maranhão Bank of Brazil (Mauá) Banco Commercial Pernambuco ‘Third’ Bank of Brazil 1855 Banco Commercial Bahia Banco Commercial Maranhão Banco Commercial Pernambuco Bank of Brazil (head office) 1856 Banco Commercial Bahia Banco Commercial Maranhão Bank of Brazil (head office) Bank of Brazil (branches) 1857 Bank of Brazil (head office) Bank of Brazil (branches) Banco Maranhão Capital Issues Deposits Loans 2500 2000 370 1000 142 7526 1458 464 9839 4236 400 5000 2000 390 2000 1000 190 98 7395 1582 516 5138 10,243 4205 471 4665 5000 2000 500 4999 838 257 1000 241 1594 500 11,210 4822 726 6081 141 12,508 552 641 11,149 1371 5000 2000 524 8000 1000 1574 1000 298 1938 500 10,758 2565 801 5763 67 14,734 4771 688 14,028 1500 2000 680 8000 1400 11,000 1000 339 1880 700 16,125 2294 1010 6464 n.a 3255 4848 908 14,150 n.a 20,493 2000 680 1700 15,900 1000 325 850 21,300 1457 924 276 3605 4056 65 2046 25,598 2000 800 19,752 4540 1000 81 27,829 16,179 817 44 1489 n.a 2463 n.a 32,574 7791 22,560 6140 800 34,007 22,966 41 9545 1760 n.a 46,294 14,295 n.a (continued)  Appendix  201 Table A2  (continued) Year/Bank Capital 1858 Bank of Brazil (head office) Bank of Brazil (branches) Banco Com & Agrícola Bco Prov Rio Grande Banco Maranhão Banco da Bahia Novo Banco Pernambuco 1859 Banco Rural & Hypothecario Bank of Brazil (head office) Bank of Brazil (branches) Banco Com & Agrícola Bco Prov Rio Grande Banco Maranhão Banco da Bahia Novo Banco de Pernambuco Issues Deposits Loans 22,560 5932 5822 377 2400 1480 35,209 29,460 5490 430 1255 1460 15,263 462 44 n.a 940 271 32,470 18,493 6509 n.a 737 5606 2406 8000 22,560 5940 7313 580 42 4000 2000 1926 36,334 29,124 7238 680 3200 1466 12,832 9639 583 358 300 183 2252 304 20,528 23,349 23,052 9234 824 938 n.a 2702 Sources: RMF, various years, and Levy and Andrade (1985, pp. 45–8) Notes: Figures for end of year Banking establishment for which data could not be found were omitted n.a.: data not available Table A3  Bank of Brazil, head office: portfolio balances, 1854–6 (in contos) Date 30 June 1854 30 June 1855 30 June 1856 30 June 1857 30 June 1858 30 June 1859 30 June 1860 36 June 1861 30 June 1862 30 June 1863 30 June 1864 30 June 1865 30 June 1866 Discounts (a) Payments (b) Portfolio balances (c) = (a)−(b) 19,375 99,259 120,443 128,453 208,251 165,237 110,068 121,053 130,329 183,204 178,601 284,739 346,516 3075 75,139 91,008 117,695 162,471 137,271 83,467 94,351 99,900 138,100 141,261 213,364 265,389 16,300 24,120 29,435 10,758 45,780 27,966 26,601 26,702 30,429 45,104 37,339 71,375 81,127 Source: Banco Brasil, Relatório Apresentado Assembléa Geral dos Accionistas, various issues 202  Appendix Table A4  Average rates of discount at Rio Banks, 1850–60 (in %) Period 1850 Jan to 16 Jan 17 Jan to 31 Jul Aug to 31 Dec 1851 Jan to 16 Apr 17 Apr to 22 Apr 23 Apr to Nov Nov to 31 Dec 1852 Jan to Jul 10 Jul to 31 Dec 1853 Jan to 28 Apr 29 Apr to 31 May Jun to 30 Jun Jul to 31 Aug Sep to 26 Sep 27 Sep to 29 Nov 30 Nov to 31 Dec 1854 Jan to 23 Apr 24 Apr to 31 Dec 1855 Jan to Apr Apr to 31 Dec Rate 7 6.5 5 6 7 8 Period 1856 Jan to 27 Nov 28 Nov to 31 Dec 1857 Jan to 11 Jan 12 Jan to May May to 13 Aug 14 Aug to 14 Dec 15 Dec to 23 Dec 24 Dec to 31 Dec 1858 Jan to 27 Jan 28 Jan to 10 Feb 11 Feb to 24 Aug 25 Aug to 11 Oct 12 Oct to Nov Nov to 20 Dec 21 Dec to 31 Dec 1859 Jan to Jun Jun to 31 Dec 1860 Jan to 31 Mar Rate 8 9 10 11 11 10 11 10 8 Source: Relatorio da Commissão de Inquerito Nomeada Por Aviso Ministerio da Fazenda, de 10 de Outubro de 1859 (undated), Annex Note: Rates refer to bills with two known signatures and, therefore, can be regarded as a minimum (prime) rate Table A5  Rate of exchange in the Rio market, October 1857 to September 1858 (in pence per milréis) 1857 1858 10/Oct 12/Oct 14/Oct 27 1/4 27 1/4 27 1/4 27 3/8 27 3/8 27 3/8 05/Nov 06/Nov 07/Nov 10/Nov 11/Nov 12/Nov 13/Nov 27 1/4 27 1/4 27 1/4 27 27 27 1/8 27 27 3/8 27 1/4 27 1/4 14/Dec 15/Dec 30/Dec 31/Dec 26 1/4 26 24 23 1/2 31/Jan 09/Jan 11/Jan 12/Jan 13/Jan 06/Feb 08/Feb 09/Feb 10/Feb 11/Feb 12/Feb 13/Feb 24 24 25 25 25 24 1/2 24 1/2 24 24 24 24 04/Mar 10/Mar 13/Mar 15/Mar 16/Mar 22 3/4 23 25 1/2 25 1/2 25 1/2 07/Apr 08/Apr 09/Apr 10/Apr 12/Apr 13/Apr 25 1/2 25 1/4 25 1/4 25 1/4 25 1/2 25 1/2 27 1/2 27 1/8 24 25 1/4 24 3/4 24 1/4 24 1/4 25 1/2 25 1/2 25 1/2 24 1/2 08/May 10/May 11/May 12/May 14/May 25 1/2 25 1/2 25 1/2 25 1/2 25 1/2 04/Jun 05/Jun 07/Jun 18/Jun 22/Jun 23/Jun 26/Jun 25 1/2 25 1/2 25 1/2 27 26 25 1/2 25 1/2 03/Jul 05/Jul 06/Jul 25 1/2 25 1/2 25 1/2 08/Jul 09/Jul 15/Jul 26/Jul 03/Aug 04/Aug 05/Aug 06/Aug 24/Aug 28/Aug 30/Aug 31/Aug 26 26 25 3/4 27 26 25 7/8 25 3/4 25 3/4 26 26 5/8 26 5/8 26 5/8 01/Sep 02/Sep 04/Sep 06/Sep 18/Sep 20/Sep 21/Sep 22/Sep 23/Sep 24/Sep 25/Sep 28/Sep 30/Sep 26 3/8 26 5/8 26 5/8 26 5/8 26 3/4 26 3/4 26 3/4 26 3/4 26 3/4 26 3/4 26 3/4 26 3/4 26 5/8 26 1/8 26 26 26 26 3/4 26 7/8 Source: Junta de Corretores de Títulos e Valores da Cidade Rio de Janeiro, ‘Livro de Registro Official de Títulos e Valores’, 1858 and 1859 Note: Rates refer to days in which there were transactions in the Rio stock exchange Table A6  Revenues and expenditures of the imperial government, 1849–50 to 1889 (in contos) Estimated Fiscal year 1849–50 1850–1 1851–2 1852–3 1853–4 1854–5 1855–6 1856–7 1857–8 1858–9 1859–60 1860–1 1861–2 1862–3 1863–4 1864–5 1865–6 1866–7 1867–8 1868–9 1869–70 1870–1 1871–2 1872–3 1873–4 1874–5 1875–6 1876–7 1877–8 1878–9 1879–80 1880–1 1881–2 1882–3 1883–4 1884–5 1885–6 1886–7 1888 1889 Revenue 25,717.2 27,200.0 27,200.0 30,500.0 32,353.0 34,000.0 34,000.0 34,000.0 35,500.5 39,428.1 45,000.0 45,000.0 49,659.7 49,659.7 51,500.0 51,500.0 55,000.0 55,000.0 71,250.0 71,250.0 71,250.0 94,100.0 95,800.0 95,800.0 103,000.0 103,000.0 106,000.0 106,000.0 102,000.0 102,000.0 116,958.0 116,958.0 116,592.0 128,960.7 128,960.7 133,049.1 133,049.1 132,881.6 138,395.0 147,200.0 Realized Expenditure Surplus (+) or deficit (−) 26,802.2 26,275.7 26,275.7 27,482.8 29,633.7 31,153.3 32,441.2 33,785.4 35,500.5 40,097.1 48,302.9 48,302.9 51,313.9 51,313.9 53,878.7 53,878.7 58,871.7 58,871.7 68,530.2 68,530.2 68,530.2 83,326.7 85,741.3 85,741.3 98,250.2 98,250.2 105,001.3 106,911.0 105,881.7 105,881.7 115,458.2 115,458.2 114,280.7 129,823.7 129,823.7 138,796.7 138,796.7 137,606.7 141,230.1 153,148.4 −1085.0 924.3 924.3 3017.2 2719.3 2846.7 1558.8 214.6 0.0 −669.0 −3302.9 −3302.9 −1654.2 −1654.2 −2378.7 −2378.7 −3871.7 −3871.7 2719.8 2719.8 2719.8 10,773.3 10,058.7 10,058.7 4749.8 4749.8 998.7 −911.0 −3881.7 −3881.7 1499.8 1499.8 2311.3 −863.0 −863.0 −5747.6 −5747.6 −4725.1 −2835.1 −5948.4 Revenue 28,200.1 31,523.7 35,786.8 36,391.0 34,516.5 36,985.5 38,634.4 49,156.4 49,747.0 46,920.0 43,807.4 50,051.7 52,488.9 48,342.0 54,801.4 56,995.9 58,523.4 64,776.8 71,200.9 87,542.5 94,847.3 95,885.0 105,135.9 112,131.1 105,009.2 106,490.5 103,499.6 101,063.6 110,745.8 116,461.0 120,762.0 131,275.0 131,987.0 129,697.7 134,568.7 124,155.6 130,309.4 221,658.6 145,896.1 160,840.3 Expenditure Surplus (+) or deficit (−) 28,949.6 33,224.6 42,754.8 31,653.5 36,234.5 38,740.3 40,242.6 40,374.0 51,755.7 52,718.6 52,606.2 52,358.4 53,049.7 57,000.1 56,494.4 83,346.2 121,856.0 120,889.8 165,984.8 150,894.8 141,594.1 100,074.3 101,580.8 121,874.5 121,480.9 125,855.3 126,780.0 135,800.7 151,492.9 181,468.6 150,133.6 138,583.1 139,470.6 153,058.0 154,257.1 158,495.8 153,623.1 227,044.8 147,450.5 186,165.9 −749.5 −1700.9 −6968.0 4737.5 −1718.0 −1754.8 −1608.2 8782.4 −2008.7 −5798.6 −8798.8 −2306.7 −560.8 −8658.1 −1693.0 −26,350.3 −63,332.6 −56,113.0 −94,783.9 −63,352.3 −46,746.8 −4189.3 3555.1 −9743.4 −16,471.7 −19,364.8 −23,280.4 −34,737.1 −40,747.1 −65,007.6 −29,371.6 −7308.1 −7483.6 −23,360.3 −19,688.4 −34,340.2 −23,313.7 −5386.2 −1554.4 −25,325.6 Sources: Carreira (1980), Brasil, IBGE (1990), and Diniz (2002) Note: Estimated revenues and expenditures refer to amounts approved by Parliament for the given fiscal year Data for the 1886–7 fiscal year refer to three semesters  Appendix  205 Table A7  Outstanding notes and bills issued by the imperial treasury, 1850–89 (in contos) Year Notes (notas) % Bills (letras) % Total 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 46,770 46,684 46,684 46,684 46,693 46,693 45,693 43,677 41,665 40,701 37,599 35,109 33,324 30,594 29,094 28,091 28,901 42,560 81,749 127,230 149,398 151,078 150,807 149,579 149,547 149,501 149,380 149,318 181,279 189,258 189,200 188,155 188,012 188,011 187,937 187,344 194,283 184,335 188,869 179,971 91.0 87.9 98.5 98.5 99.5 96.8 92.7 99.2 99.9 99.9 99.9 88.4 88.5 84.5 78.7 69.4 47.9 48.5 55.0 66.7 72.5 79.0 91.9 91.9 90.2 88.1 88.0 87.1 80.0 85.7 93.2 89.1 86.6 80.1 80.1 78.9 72.2 85.6 85.8 100.0 4631 6448 723 723 246 1566 3596 367 34 27 32 4600 4337 5592 7852 12,400 31,481 45,162 66,819 63,481 56,687 40,132 13,255 13,109 16,256 20,179 20,339 22,156 45,393 31,465 13,767 22,991 28,985 46,652 46,549 50,076 74,796 31,009 31,351 78 9.0 12.1 1.5 1.5 0.5 3.2 7.3 0.8 0.1 0.1 0.1 11.6 11.5 15.5 21.3 30.6 52.1 51.5 45.0 33.3 27.5 21.0 8.1 8.1 9.8 11.9 12.0 12.9 20.0 14.3 6.8 10.9 13.4 19.9 19.9 21.1 27.8 14.4 14.2 0.0 51,401 53,133 47,407 47,407 46,939 48,259 49,289 44,043 41,698 40,728 37,631 39,708 37,660 36,186 36,946 40,491 60,381 87,722 148,568 190,710 206,085 191,210 164,062 162,688 165,802 169,681 169,719 171,474 226,672 220,724 202,966 211,146 216,997 234,663 234,485 237,419 269,078 215,344 220,220 180,049 Source: RMF, various issues Notes: Notes refer to legal tender notes Bills are short-term (less than one year) interest-bearing liabilities issued in anticipation of government revenues Data for notes refer to March or April Bills outstanding as of March 206  Appendix Table A8  Issues of bonds of the consolidated imperial debt (apólices), 1851/89 (in contos) Year 6% 1851–3 1858 1860–2 1860–3 1860–72 1861–2 1863 1864 1865 1865–72 1869 1870 1870 1871 1873–6 1876 1877 1877 1879 1880–2 5% 1886 Total Purpose of Issue Amount Deficit financing Payment of Portuguese claims Share swaps of the Pernambuco Railway Co Share swaps of the Bahia Railway Co Share swaps of the D. Pedro II Railway Co Payment to Bank of Brazil for Treasury notes retired from circulation Compensation for goods captured from the Spanish in the wars of Independence and in the River Plate; withdrawal of Treasury notes and bills from circulation Nationalization of the União e Indústria Co Withdrawal of Treasury notes from circulation; wedding expenses of Princesses Izabel and Leopoldina Expenses incurred in the Paraguayan War Purchase of property at the Lagoa Purchase of the Enxadas Island Retirement of Treasury bills ? Payment to the Rio Dock Co Deficit financing Sundry services Dowry for Princess Januaria Consolidation of the floating debt Share swaps of the Baturité Railway Co Total 6% Issued, 1850–89 5213.8 5.4 2466.4 186.6 11,328.6 2150.0 Consolidation of the floating debt Source: RMF 1889/90, Table N.6 5890.4 3161.0 1228.0 143,894.7 50.0 1705.8 25,000.0 0.6 2734.0 8600.0 30,000.0 1200.0 40,000.0 606.0 285,421.3 50,000.0 335,421.3  Appendix  207 Table A9  Foreign loans contracted by the imperial government, 1850/89 Date Purpose 1852 Payment of remaining part of loan contracted by Portugal in 1823, and taken up by Brazil 1858 Nationalization and extension of the D. Pedro II Railway 1859 Rescheduling of 1829 loan 1860 Loan for Cia União e Indústria, Cia Mucury, and Pernambuco Railway Co 1863 Liquidation of outstanding part of the 1824 and 1843 loans; consolidation of part of the floating Treasury debt 1865 Financing of extraordinary expenses of the Treasury with the Paraguayan War 1871 Consolidation of the floating debt; extension of the Pedro II Railway; deficit financing 1875 Railroad construction and dividend guarantees 1883 Investments in assorted public works 1886 Deficit financing; consolidation of the floating debt 1888 Anticipation of difficulties arising from abolition of slavery 1889 Consolidation of the foreign debt (conversion loan) Nominal value Issue price (£) 1,040,000 (%) 95 1,526,500 94.5 Net value Rate of interest (£) 954,250 (%) 4.5 1,425,000 4.5 508,000 100 1,373,000 90 508,000 1,210,000 5.0 4.5 3,855,300 88 3,300,000 4.5 6,963,600 74 5,000,000 5.0 3,459,000 89 3,000,000 5.0 5,301,200 96.5 5,000,000 5.0 4,599,600 6,431,000 89 95 4,000,000 6,000,000 4.5 4.5 6,279,300 97 6,000,000 4.5 19,837,000 90 17,440,300 4.0 Sources: Bouỗas (1955), Carreira (1980), and Summerhill (2015) References Bouỗas, Valentim F 1955 Finanỗas Brasil, vol XIX (Dớvida Externa, 1824 1945) Rio de Janeiro: Ministério da Fazenda Brasil, IBGE 1990 Estatísticas Históricas Brasil, vol (séries econơmicas, demográficas e sociais, 1550–1985) 2nd ed Rio de Janeiro: IBGE Carreira, Liberato de C 1980 Histúria Financeira e Orỗamentỏria Impộrio Brasil, vols Brasília: Senado Federal/Casa de Rui Barbosa 208  Appendix Diniz, Adalton F 2002 Centralizaỗóo Polớtica e Apropriaỗóo de Riqueza: anỏlise das finanỗas Impộrio brasileiro (18211889) Ph.D. Dissertation, Universidade de São Paulo Levy, Maria Barbara, and Ana Maria R de Andrade 1985 Fundamentos Sistema Bancário no Brasil: 1834–1860 Estudos Econômicos 15 (Special Issue): 17–48 Summerhill, William R 2015 Inglorious Revolution: Political Institutions, Sovereign Debt, and Financial Underdevelopment in Imperial Brazil New Haven: Yale University Press Index1 A Agricultural Congress (1878), 131n68 Apólices (government bonds), 2, 26, 52n58, 66, 99–101, 108–111, 113, 117–119, 130n56, 132n77, 143–145, 161, 206 Auxílios lavoura (aid to planters) program, 120, 121, 170 B Banco Commercial & Agrícola, 31, 51n44, 66, 176n53 Banco Commercial Rio de Janeiro, 13, 17, 129n50, 154, 174n37 Banco da Bahia, 51n44, 121, 124n16, 133n87 Banco Brasil, x, 2, 3, 8, 10n3, 17–31, 33–35, 37–46, 47n16, 47n18, 48n23, 48n27, 49n31, 49n32, 49n35, 50n38, 51n46, 52n53, 52n56, 52n57, 52n60, 53n62, 53n64, 53n65, 54n73, 55n76, 55n78, 63, 65, 66 establishment of third, 8, 18–25, 27, 48n23, 97, 122, 129n50, 142, 155, 160, 161, 163, 194 issuing rights, 8, 81, 100, 142, 191 mortgage operations, 97, 105, 106, 120, 123n6, 124n15, 128n45, 133n87 as “proto central bank”, x, 3, 194 reserve fund (fundo disponível), 21, 39, 68, 69, 71, 73, 82, 87n42, 161 second (Mauá), 17–19, 49n35, 112, 155 Banco Mauá & Cia, 106  Note: Page numbers followed by ‘n’ refer to notes © The Author(s) 2020 A A Villela, The Political Economy of Money and Banking in Imperial Brazil, 1850–1889, Palgrave Studies in the History of Finance, https://doi.org/10.1007/978-3-030-32774-3 209 210  INDEX Banco Mauá, MacGregor & Cia., 22, 23, 36, 38, 48n24, 52n56, 54n69, 87n43, 106–108, 110, 112, 129n50, 130n62, 139, 157, 189 Banco Rural & Hypothecario, 48n23, 51n44 Bank of Brazil, see Banco Brasil Banks of issue, 3, 4, 7, 16, 19, 25–38, 40, 43, 45, 55n76, 55n79, 61, 62, 65, 66, 77, 79, 86n31, 115, 119, 121, 133n88, 150, 153, 155–157, 159, 164, 166, 167, 169, 187, 189, 190, 193–195, 200–201 British banks, 5, 86n31, 174n32 C Caixa de Amortizaỗóo, 34, 50n38, 119 Casas bancỏrias, vii, 2, 7–9, 13, 50n41, 68, 70–82, 87n44, 87n47, 89n62, 89n65, 100, 130n59, 137–139, 147, 156–158, 164, 170n4, 171n8, 175n46, 186, 188 Casa Souto (José Alves Souto & Cia.), 70, 72, 79, 81, 87n47, 188 Cavalcanti, Amaro, 14, 16, 18, 23, 39, 40, 47n18, 52n54, 54n67, 55n76, 89n70, 93, 170n4, 171n5, 175n44 Coffee exports, 1, 76, 106, 129n49 financing of, 133n91, 151, 186 Comissários (coffee factors), 152 Commercial banks deposits in, 127n38, 138, 193 discounts, 20 interest rates, Commercial Code of 1850, 8, 17, 27, 62, 155, 158, 159, 187 Conciliaỗóo period, 6, 50n43, 70 Convertibility of banknotes, 62, 164, 168 Corporate law, 95, 154, 158, 187, 194 Cotegipe, João Mauricio Wanderley, barão de, 24, 25, 113, 115, 117, 119 Council of State Conselho Pleno, 48n23, 67, 68, 83 Finance Standing Committee, 82, 189, 194 Crises, financial of 1857, of 1875 (Mauá), of 1873 and limited impact in Brazil, 106 of 1864 (Souto), D Deutsche Brasilianische Bank, 108 Domestic debt consolidated, 100 floating, 143, 145 E Exchange rate defense of, 190, 196n15 and monetary policy, 7, 169, 173n23 ‘notional’ 27d parity, 103 quotation in Rio de Janeiro market, 51n48 stability, 7, 29, 53n62, 149, 163, 164, 195n3 F Fazendeiros (planters), 4, 7, 93, 94, 104, 148, 150–152, 163, 190, 195 Ferraz, Angelo Muniz da S., 42, 46, 51n46, 61, 75, 76, 83n6, 85n15, 87n47, 176n54, 177n64 Fiscal policy, 50n42, 103, 104, 117, 142, 196n8 Forced adjudication, 105, 117, 151  INDEX  Foreign debt, 44, 57n91, 106, 113, 114, 126n29, 148, 149 Franco, Bernardo de S., 26, 27, 29, 30, 34, 35, 38, 39, 50n43, 52n57, 53n63, 54n66, 54n73, 55n76, 55n77, 61, 67, 83, 85n19, 87n47, 95, 96, 118, 119, 153, 156, 157, 165–168, 177n64, 177n66, 179n79, 189–191 G Goldsmith, Raymond, 79, 126n32, 139, 140, 175n46 Gold standard, x, 5, 6, 28, 121, 122, 133n84, 164, 166–170, 173n23, 178n77, 179n79, 185, 186, 190, 192, 193, 195n3 Government budget, 56n84, 104, 132n76, 137 Grande Sêca (Great Drought), 114, 195 H “Hard money”, 6, 40, 55n83, 57n90, 145, 148, 165, 170, 191, 192, 194, 195 I Interest rates, 2, 28, 37, 45, 57n92, 68, 121, 123n5, 150, 151, 156 Issuing rights, 6, 8, 9, 13–15, 19, 21, 23–25, 28, 29, 31, 38, 44, 62, 63, 66, 69, 71, 74, 80–83, 85–86n25, 89n69, 96, 99, 100, 119, 125n20, 125n23, 131n66, 140, 147, 155–158, 163, 164, 167, 175n44, 177n61, 187–190, 195 limits to, 39, 41 plurality of, 8, 19, 25, 31, 55n76, 55n78, 80, 83, 96, 119, 140, 155–157, 167, 168, 178n68, 179n79, 191, 192, 195 211 Treasury monopoly, 144 Itaboraí, Joaquim José Rodrigues Torres, visconde de, 10n16, 14–16, 19–21, 24, 34, 38–40, 46n4, 47n6, 49n32, 52n60, 52n61, 53n63, 83, 85n25, 95, 99, 101, 124n14, 149, 153, 155, 156, 165, 167, 194 L Law of Impediments, 46, 61–83, 98, 115, 157–159, 168, 169, 171n9, 176n52, 187, 188, 191, 196n18 Letras Tesouro (Treasury bills), 18, 53n64, 68, 82, 94, 95, 111, 113, 125n20, 127n36, 127n37, 144, 145 Limited liability, 154, 158, 159, 176n48, 176n51 M Mauá, Irineu Evangelista de Souza, barão de, 17 Metalistas, 44, 57n90, 61–71, 95, 165–167, 177n64, 189, 192 Monetary policy and banks, viii political economy of, 149, 173n23, 190 Money supply, 4, 13, 14, 26, 31, 39, 45, 46, 47n19, 79–81, 89n67, 89n68, 89n70, 104, 121, 124n16, 127n40, 137–154, 156, 157, 170n4, 170–171n5, 172n17, 175n44, 175n46, 188, 189, 191–193 Mortgage credit, 113, 117, 123n6 N National Loans, 99, 115, 121, 131n70, 143–145 Note issues, see Issuing rights 212  INDEX O Ouro Preto, Afonso Celso, visconde de, 9, 49n35, 68, 120–122, 131n65, 133n87, 133n90, 133n95, 164, 170 P Pacheco, Claudio, 34, 47n9, 50n35, 66–68, 72, 78, 79, 82, 87n42, 88n56, 94, 95, 97, 99, 105, 107–110, 113–115, 119, 120, 124n13, 124n14, 124n19, 129n53, 174n40, 174n41 Papelistas, 57n90, 95, 165–167, 189, 192 Paraguayan War (1864–1870), 144 Peláez, Carlos Manuel and Wilson Suzigan, 46n3, 52n54, 67, 79, 81, 126n31, 127n38, 127n39, 130n61, 138–140, 147, 157, 170n5, 174n38, 186–188 Private banks, see Casas bancárias R Rio Branco, José Maria da Silva Paranhos, visconde de, 87n47, 102–113, 127n36, 130n58, 177n64, 196n8 Rothschilds, 143 S Slavery abolition of, 101, 117, 119 end of transatlantic slave trade, 7, 13, 17 Free Womb Law, 102 Soares, Sebastião F., 26, 169, 175n45, 189 “Soft money”, 4, 6, 7, 55n83, 148, 149, 191, 192 Souto, Antonio José A., 52n53, 65, 70, 71 See also Casa Souto (José Alves Souto & Cia.) Specie, 15, 17, 20, 39, 40, 48n20, 66, 68, 87n43, 102, 108, 116, 117, 119, 127n39, 138, 139, 158, 161, 163, 164, 166, 170n4, 171n5, 175n44, 178n73 Summerhill, William, 174n33 Sweigart, Joseph, 54n71, 86n31, 117, 128n43, 129n49, 131n72, 151, 175n46, 186 T Torres Homem, Francisco de S., 38–41, 54n74, 55n79, 55n80, 56n85, 56n86, 56n87, 56n88, 61, 62, 83n6, 96, 101, 124n14, 125n19, 154, 157, 165, 166, 177n66, 191 Treasury notes, 1, 13–21, 23, 26, 30, 34, 39–41, 45, 48n20, 49n34, 52n55, 55n75, 55n79, 63–66, 69, 84n9, 84n12, 86n28, 93, 97–100, 103, 111, 112, 114, 115, 117, 122, 123n1, 125n20, 125n25, 126n31, 131n71, 142, 144, 145, 147, 161, 164, 166, 186, 188 U Uruguay, 107, 108, 129n50, 178n73, 189 V Vales (short-term promissory notes), 1, 8, 13, 17, 18, 20, 22, 23, 43, 44, 46n2, 48n20, 48n23, 50n41, 63, 73, 77, 79, 81, 89n64, 127n39, 147, 154, 155, 158–161, 171n8, 174n37, 188 Vasconcellos, Zacarias de G., 71, 81, 110, 111 ... handful of commercial banks As this book will document in detail, the nature of money over the rest of the © The Author(s) 2020 A A Villela, The Political Economy of Money and Banking in? ?Imperial Brazil,. .. 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