What Did Portugal Do With the Brazilian Gold?
During the Colonial Period, Particularly in the 18th Century, Brazil Became a Significant Source of Gold, Primarily from the Minas Gerais Region.
The Portuguese Crown Implemented Several Measures to Control and Profit from This Wealth through Taxation, Regulations, and Investment in Multiple Areas. This Gold Played a Crucial Role in Shaping Portugal's Economy and Colonial Policies.
Taxation - The Quinto
The Portuguese government imposed heavy taxes on gold production, most notably the Quinto, which required miners to pay 20% of their gold output to the crown. This tax was a crucial source of revenue for Portugal and solidified the crown's control over the gold wealth.
Regulation of Mining
Strict regulations were established on mining activities, with all gold required to be brought to the crown for assessment and taxation before it could be sold or exported. This ensured the government's control over the trade and extracted maximum benefit from the gold extracted from Brazil.
Use of Wealth - Financing the Portuguese Empire and Monarchy
The gold extracted from Brazil was used to finance various aspects of the Portuguese Empire, including military campaigns, administrative costs, and investments in other colonies. It contributed to the wealth of the Portuguese monarchy and solidified Portugal's colonial influence.
Cultural and Architectural Impact
The influx of gold led to significant economic growth in Portugal and influenced the arts, architecture, and culture. The wealth generated from Brazilian gold helped fund the construction of Baroque churches and public buildings, contributing to the cultural renaissance of Portugal.
Economic Shifts - The Shift from Agriculture to Mining
The gold rush in Brazil shifted the economic focus from agriculture to mining, leading to a demographic and social transformation in colonial Brazil. This shift had long-lasting effects on the socio-economic landscape of the region.
Trade Implications: Brazil, England, and the Iberian Trade Balance
A fair part of the Brazilian gold went to England due to Portugal's negative trade balance with England, exacerbated by the Treaty of Methuen in 1703. As people in Minas Gerais became wealthier, they started buying more goods from Portugal, which officially Brazil could not trade directly with any country except Portugal.
The influx of Brazilian gold to Portugal helped the Iberians to control their balance sheet deficit, especially with the British but also with the Dutch, French, and others. It is estimated that one to two-thirds of the gold mined in Brazil flowed to England in the first half of the eighteenth century.
Global Repercussions: Gold in Belfast, Calais, and New York
From Britain, Brazilian gold rushed to Belfast, Calais, New York, and who knows where else. In that context, money and gold serve better when they are moving through many hands rather than stored. Some of it may have returned to Lisbon or even Rio de Janeiro.
As a consequence, the abundance of Brazilian gold entering England after briefly passing through Lisbon favoured the flourishing of the banking and financial industry in the island. It is no coincidence that the House of Rothschild, one of the most influential banking families, emerged around this period of gold influx.
Brazilian Gold and the Independence of Brazil
Interestingly, Brazilian gold rebranded as Rothschild gold, likely contributed to the means that paid for the independence of Brazil exactly 200 years and one day ago.
In conclusion, the Brazilian gold played a pivotal role in shaping Portugal's economy, cultural landscape, and global trade networks, with far-reaching implications that extended beyond the colonial period.