Old Christian Merchants and the Foundation of the Brazil Company, 1649

Few stereotypes of Luso-Brazilian history have endured more tenaciously than the concept of the merchant as Jew, crypto-Jew, or foreigner. The association of the mercantile profession with New Christians has been particularly strong for the seventeenth century, with the terms burguesia and cristãos-novos often being used interchangeably in works about that period.¹ The political, social, and religious factors which contributed to the concentration of New Christians in commerce are familiar and need not be elaborated here. The converse theoretical explanation is that Portuguese gentiles (or Old Christians) abandoned the field to the interlopers because of their inability or unwillingness to compete with the New Christians’ supposed racial aptitude for trade and their clannish favoritism in business practice. As commerce became ever more linked in the popular mind with the despised crypto-Jew, fear of guilt by association increased the aversion of Old Christians to the mercantile arts, ultimately leaving Portuguese trade in the hands of the New Christians. To contemporaries the problem appeared so compelling that in 1629 D. Felipe IV called a council of ecclesiastics and jurists to consider measures for dealing with the New Christians, whose monopoly of trade allegedly caused prices to soar “thus sucking all the money from the populace, so that there was nowhere to be found a rich man who was not of the [Hebrew] nation.”²

Modern historians have agreed by and large with this assessment of the situation, if not with the bitter denunciation. As I. S. Révah phrased it, “The cristãos-novos constituted the essential part of the Portuguese merchant class, and their economic importance was equally great in Brazil.”³ Frédéric Mauro also commented on the growing influence of the New Christian merchants, who through the course of the sixteenth century gradually replaced foreigners as lenders to the Portuguese crown for the East Indian enterprises: “And when, after 1550 and particularly after 1570, these enterprises fall into decay, one sees the King renounce the royal monopoly and confer the trade in spices on the New Christian contratadores—that is, rentiers or entrepreneurs.” Mauro goes on to note the net of family relations that linked Portuguese New Christians with their co-religionists who had fled the Inquisition to Northern Europe: “These are the Portuguese who were found throughout Europe. One may well say ‘Portuguese’ since for the European of the 1600s in Antwerp, Rouen, or Genoa, ‘Portuguese’ and ‘New Christian’ were synonymous.”⁴ In another provocative essay on Portuguese merchants and merchant-bankers, Mauro points out the paramount importance of the Inquisition trials as source material and adds that in seeking to identify the New Christians through these trials “one would find practically the essential part of the Portuguese mercantile bourgeoisie, at least in the seventeenth century.”⁵

Indeed, there is a great deal of evidence to support this view. One will search in vain for an Old Christian Portuguese merchant resident in France, Germany, or the Low Countries. New Christian merchants and merchant-bankers were extremely visible in the Lisbon marketplace, and concentration on Inquisition sources by modern scholars will tend to highlight this prominence. However, there is increasing reason to question the New Christians’ commercial monopoly in the seventeenth century. Virgínia Rau has called attention to the active participation of the Portuguese nobility in trade,⁶ and Jorge Borges de Macedo, in an essay on the Portuguese bourgeoisie, suggested that this class in the seventeenth century continued to be “a multiform social group, strongly infiltrated, especially in the upper levels, by foreign elements and interests of the nobility and the King, with whom it collaborated in financial administration of the State and in the collection of revenues.”⁷ Despite these tentative reinterpretations, no systematic study of the Portuguese merchant class has yet appeared either to confirm the traditional concept or to provide substance for a corrective revision.⁸

Such an undertaking is beyond the scope of this paper,⁹ but an examination of the major investors and directors of the Companhia Geral do Comércio do Brasil provides an informative insight into the composition of those upper levels of the Lisbon merchant class to which Macedo referred, for it was precisely from this small group of merchant-bankers that the Company’s directors were drawn. In addition, this information affords a new perspective on the circumstances of the founding of the Brazil Company (hereinafter so identified), which received its charter in 1649 and was the first Portuguese joint-stock enterprise to reach fruition.¹⁰ Professors C. R. Boxer, I. S. Révah, and Gustavo de Freitas have dealt with the company’s establishment in detail.¹¹ Their accounts, though independently researched, concur on all basic points, and a brief resumé of their interpretation is essential to an understanding of the discussion which follows.

I

In 1649, Portugal found herself isolated and threatened on all sides. The acclamation of the Duke of Braganza as king of an independent Portugal in 1640 had initiated a protracted war with Spain that was to last twenty-eight years. Portuguese prospects looked particularly dismal when the Treaties of Westphalia ended the Thirty Years War in 1648 and freed the Spanish monarch to concentrate on subduing his rebellious former subjects. In Brazil, Pernambuco still was held by the Dutch, whose depredations had caused disastrous losses to Portuguese shipping in the Atlantic. Relations with parliamentary England remained precarious at best, because of D. João IV’s espousal of the royalist cause, and hostilities threatened constantly from that direction. To complete the disheartening picture, the loss of the most valuable portions of Portugal’s Far Eastern empire to the Dutch and English had reduced the once opulent India trade to an uncertain trickle.

In this context, the Portuguese Crown (and indeed the Portuguese economy) depended heavily on the revenues derived from the Brazilian sugar trade, and its disruption promised to bring ruinous consequences. However, the Portuguese Crown lacked resources to provide adequate protection for merchant shipping in the Atlantic. To preserve this vital traffic, Padre António Vieira, D. João’s most influential advisor, strongly pushed the idea of a monopoly trading company modelled after the Dutch West India Company (1621), which would provide an armed escort for the Brazilian sugar fleets. Thus private capital would be harnessed to serve the interests of the State.

This scheme received greater impetus following the success of Salvador de Sá’s expeditions to Brazil and Angola in 1647-1648. Vieira had arranged financing for that fleet through his friend Duarte da Silva, a New Christian businessman, perhaps the richest in Lisbon. Other prominent New Christian merchants had contributed as well: Manuel Rodrigues da Costa, Gaspar Dias de Mesquita, and Jerónimo Gomes Pessoa.¹² This venture proved that there was capital in the Lisbon mercantile community to finance a project like the Brazil Company. The remaining obstacle was winning D. João’s approval over the vehement opposition of the Inquisition.

Professors Boxer, Révah, and Freitas all agree that Vieira planned to finance the company with New Christian capital, the only possible source for funds of such magnitude. The lure held out to attract the necessary investment was suppression of the Inquisition’s power to confiscate the property of persons it arrested.¹³ Portuguese New Christians had long sought such a reform in the rules of the Holy Office, along with others that would have brought Portuguese practices more in line with those of the Castilian Inquisition. The ensuing controversy focused on the question of confiscation. The Holy Office railed against the use of “tainted” New Christian money in the Brazil Company project since the corollary, abolition of its confiscatory powers, threatened the economic base for its continued existence. The Jesuits, led by Vieira, for a variety of reasons championed the New Christian cause.¹⁴ Eventually Vieira’s partisans prevailed, and on February 6, 1649, D. Joao issued his famous alvará suppressing the confiscation in the following terms:

One month later, March 10, 1649, another alvará approved the statutes of the Brazil Company, which were dated March 8, 1649.

The establishment of the company has always been presented in this light: essentially as an enterprise initiated by the State to perform a function it could not otherwise afford, conceived and fought for by Vieira, and financed with capital coaxed (one might say that “extorted” would not be too strong a term) from New Christian merchants in exchange for a guarantee not to confiscate or inventory the property of those arrested by the Inquisition. Given these factors, plus a mercantile bourgeoisie supposedly composed almost exclusively of New Christians, one would expect all the major shareholders and directors of the Brazil Company to come from that group as well. The fact that several of them were not only Old Christians, but also familiars of the Inquisition, suggests strongly that these interpretations will require some revision.¹⁷

The researcher seeking a list of the Brazil Company’s shareholders is greatly hampered by the loss of the company’s functional records. In fact, the only “list” of investors yet to emerge appears in a letter to the regent, Prince D. Pedro, written by his Jesuit confessor, Manoel Fernandes, some twenty-four years after the company’s foundation.¹⁸ The letter is a plea in favor of establishing an East India Company with money from the New Christian community, again in exchange for reforms reducing the Inquisition’s powers. The writer stated that 1,300,000 cruzados has been invested in the Brazil Company and cited some of the major New Christian investors: the Botelho family with 40,000 cruzados; the Serroes with 40,000; the Carvalhos with 60,000; Francisco Dias de Leão with 16,000; Gregório Mendes da Silva with 15,000; Álvaro Fernandes de Elvas with 15,000; Jerónimo Gomes [Pessoa] with 15,000; plus the investments of Duarte da Silva and António de Padua, not specified. One may suspect the strict accuracy of these figures, but assuming they are roughly correct, this accounts for 236,000 cruzados, or only about 18 percent of the total investment. Even including a reasonable figure for Duarte da Silva and António de Padua, this leaves the great bulk of the total capital still unaccounted for.

The list of directors and counsellors of the original Junta of the Brazil Company provides the names of some other major investors. The original Junta consisted of nine deputados and seven conselheiros. The former were elected triennially by shareholders who had invested more than 5,000 cruzados, and only businessmen (homens de negocio) were eligible. To be strictly accurate, the charter specified no minimum investment for the conselheiros, who were elected by the Lisbon mercantile communitv (os homens do commércio). However, it is highly unlikely that they had no financial interest in the company. The Junta chose one deputado from four nominees selected by the Lisbon Casa dos Vinte e Quatro to represent the public interest.¹⁹ It is not known which of the directors served this function; all of the directors and counsellors were, in fact, Lisbon merchant-bankers.

The original Junta of the Brazil Company (or Junta do Comercio, as it was usually called)²⁰ included the following men:

Several of these names also appear on the 1673 list cited above.²¹

When the Crown reformed the administration of the company in 1662, the three representatives from the merchant community named as directors were: Manuel Martins Medina (who in 1654 was already serving as diputado), Gaspar Gonçalves do Souto, and João Guterres (who had ear her served as conselheiro); Pantalião Figueira was named to the office of Secretary.²²

Of these nineteen men, eight were Old Christians: Gaspar Pacheco, Gaspar Malheiro, Francisco Fernandes Fuma, Matias Lopes, João Guterres, Manuel Martins Medina, Gaspar Gonçalves do Souto, and Pantalião Figuera.²³ Five of this group were familiars of the Inquisition: Malheiro, Fuma, Lopes, Medina, and Figueira. None of these Old Christians was born with any real pretensions to nobility, although one of the New Christians, Francisco Botelho Chacão, was.²⁴ Of the six men whose birthplace is known, not one was born in Lisbon.

It is worthwhile to examine in some detail the Uves of a few of these Old Christian merchant-bankers, for their geographical origins, the social status of their ancestors, their marital arrangements, their commercial associations (especially with other directors of the Brazil Company), and their business activities reveal interesting patterns suggestive of broader applications in the study of the Portuguese mercantile bourgeoisie.

II

Gaspar Malheiro managed to raise his family to greater eminence than any of the other men in this small group, but he had the advantage of a slightly higher social position at birth. He was born about 1607 in the parish of São Cipriano, diocese of Lamego, near the Domo River in the province of Beira Alta. During the background investigation made to establish his fitness to join the ranks of the Inquisition’s familiars, nothing was said about his parents’ professions, but one eighty-year-old witness remembered that his paternal grandparents had been “cava[leiros e nob]res m^to omrados,” and that his maternal grandfather—likewise a very honored gentleman and noble, nicknamed “o Manteiga”—had often served as judge on the local village council. From this evidence one may infer that the family had some modest landholdings, but despite their prominence on the local scene, it is not likely that they enjoyed any great wealth. São Cipriano even today lies in an isolated valley off the highway that follows the Douro, and the wine culture that later brought prosperity to the region had not yet made its appearance in the early seventeenth century.

In 1623 at the age of sixteen, Gaspar Malheiro left the North for Lisbon, where he married the daughter of a bookprinter, Antonio Alvares (perhaps not so incidentally, the same man who printed the Brazil Company’s charter in 1649). Francisco Malheiro, Gaspar’s eldest son, was born in 1633. We know nothing else about his career up to the time he received his carta de familiar from the Inquisition on October 20, 1638.²⁵ Very probably his marriage brought him a modest dowry and connections in the Lisbon marketplace. In any case, in 1639 he testified for the Inquisition habilitação of Manuel Martins Medina (also later to become a director of the Brazil Company), saying that he owed money on his account with Medina for some merchandise he had bought to sell overseas.²⁶

After the acclamation of D. João IV, Gaspar Malheiro began to appear in the role of assentista as well as in that of merchant. The Portuguese war for independence offered opportunities for profit to the clever entrepreneur, and Malheiro and his colleagues were quick to exploit them. On June 8, 1643, he and Baltazar Rodrigues de Matos (another future director of the Brazil Company) along with other unnamed associates contracted for 1,500,000 cruzados to supply the armies fighting on the Spanish frontier. The contractors received their repayment partly in money and partly in kind. At the end of the contract year a quittance was drawn up acknowledging payment in money of 477:889$395 réis, the equivalent of 1,194,723 cruzados.²⁷ Malheiro did not enter the contract for the next year, but in 1647 he and his brother Manuel, who had joined him in Lisbon sometime before 1638, signed a new contract with the Junta dos Tres Estados for the same purpose.²⁸ The quittance given to the brothers for the year 1648-1649 involved the sum of 535:985$331 réis.²⁹ Gaspar Malheiro continued until his death in January 1658 to assume these lucrative contracts for pão de munição for the infantry and barley for the cavalry in company with his brother, his son Francisco, or two other Lisbon merchant-bankers: Christóvão Rodrigues Marques and the elder Pedro Fernandes Lemos (both New Christians). The total value of payment received for these contracts reached the huge sum of 2,920 contos de reis, or over 7,300,000 cruzados,³⁰ beside which the entire investment in the Brazil Company (1,300,000 cruzados) appears relatively modest. Obviously only a fraction of the total remained with the contractors as profit, but it is clear that they had at their disposal enormous sums of money to invest in supply contracts and other enterprises. At the time of his death, the Royal Treasury owed Gaspar Malheiro nearly 200,000 cruzados for these contracts.³¹

Gaspar Malheiro did not, of course, limit his activities to provisioning the army. He lent substantial amounts of money at interest to individuals: 1,000 cruzados to the Countess of Feira in 1649;³² 2,000 cruzados to the widow of Dezembargador (appellate judge) Lourenço Pires de Carvalho in 1654.³³ He and his brother also had commercial interests in India. In 1650 they obtained an alvará allowing Marcos de Oliveira to act as their attorney (procurador) in Goa, despite legal impediments because Oliveira was escrwão de agravos there.³⁴

At some point in his career, Gaspar Malheiro was knighted and assumed the title of Fidalgo da Casa Real. By the time he died, he had acquired many of the material trappings of nobility as well, including a quinta worth 13,800 cruzados in the suburban parish of São Sebastião de Pedreira. He and his wife instituted a mor gado (entail) which his son Francisco inherited. His terça (the one-third part of an estate that the testator could bestow as he chose) also went into the entailed estate. Besides Francisco, another son and two daughters survived him. One daughter, embellished with a dowry of 15,000 cruzados, married Diogo Leite Pacheco de Macedo, a fidalgo from Santarém. The other daughter was promised to his brother Manuel’s son, Luís Malheiro. This alliance caused some confusion because Gaspar had arranged his daughter’s marriage to another nephew when the papal dispensation arrived authorizing the first match. To assure the intrafamily connection, Gaspar’s will stipulated that if his daughters should die or take religious vows, his younger son Miguel Pereira should marry his brother’s daughter.³⁵ Such marriages between cousins, and even between uncle and niece, were extremely common among Portuguese merchant families. The net effect of such matches, and certainly the foremost reason for arranging them, was to avoid dispersal of wealth through an indiscriminate proliferation of descendants.

In addition to the entail, Gaspar Malheiro endeavored to insure the permanence of his memory by endowing a chapel in the cloister of the Lisbon cathedral, where his wife and brother already lay buried when he dictated his will. For a man of such ample means, his own funeral was a modest affair. His procession included only the clerics of his parish of São João da Praça and twenty more from the Cathedral. His will made no mention of membership in any lay brotherhood, a conspicuous omission, and despite the religious zeal suggested by the office of familiar (or perhaps because of it), he did not feel compelled to guarantee his salvation by having a large number of masses said for his soul.³⁶ Few of his fellow businessmen demonstrated such self-assurance with regard to the hereafter.

Perhaps the strongest proof of Gaspar Malheiro’s success rested in his son Francisco, heir to the entailed fortune. Like his father, Francisco sought and obtained admission as a familiar of the Holy Office. Because the purity of his blood was accepted without a murmur, the investigation centered around his betrothed, Dona Maria de Meneses, who also had to pass the test. This lady was well-enough-born, though not without a blot on her escutcheon, since her mother was the product of a Raison between Dorn Paulo de Meneses (son of Dorn Diogo de Meneses, governor of India, 1577-1578)³⁷ and Luisa Fernandes, a charcoal vendor. Despite her illegitimate origin, D. Maria’s mother was acknowledged by D. Paulo, which enabled her to bear the courtesy title of “dona” (which was not accorded nearly as freely in the seventeenth century as today) and to marry a gentleman relative of the Meirinho-mór (D. Vasco de Mascarenhas, Conde de Óbidos and the second viceroy of Brazil). Thus Francisco Malheiro’s marriage connected him with two of Portugal’s most powerful noble famibes.³⁸

The combination of an advantageous marriage and wealth acquired by inheritance plus his own business operations by 1670 gained Francisco Malheiro the office that crowned his career: a seat on the Conselho Ultramarino, the governing council for all of Portugal’s overseas possessions.³⁹ His attainment of this exalted position did not, however, mean that he abandoned his financial activities. He continued to make contracts to supply the army in Tras-os-Montes and the coastal forts of Cascais, Setúbal, and Peniche, and to ship tobacco to India. In 1672 he hired a Dutch ship to fetch a cargo of Bahian sugar, investing more than 3,000 cruzados in the voyage. All of these transactions were made in partnership with eminent New Christian merchants in Lisbon, one of whom he defended as a character witness before the Inquisition tribunal.⁴⁰ Like his father, Francisco Malheiro had no qualms about associating himself publicly with his suspect business colleagues, even when they were being persecuted by the very organization for which he was an agent.

If Gaspar Malheiro’s ancestors enjoyed a certain local distinction, the same cannot be said about the forebears of Francisco Fernandes Fuma, who was born in 1600 about a league from the city of Funchal on the Atlantic island of Madeira. Curiously enough, none of the people questioned on Madeira for his habilitação as familiar in 1639 remembered his grandparents, but his parents were well-known as farmers, and one witness recalled that they had farmed land owned by his relatives. Nothing indicates that they possessed any real property themselves.

It is not known precisely how Francisco Fernandes Furna got his start in business, but the evidence suggests that he left Madeira as a young man and went to Lisbon where he married advantageously. His first wife was Joana Cado, the granddaughter of two foreign merchants: one French and the other Dutch. Both of her parents were natives of Lisbon, part of the permanent foreign merchant community there, but her maternal grandparents eventually returned to Amsterdam. Her uncle, Justo Beneque, had made trading voyages to Brazil in the sixteenth century. For an introduction into the Lisbon marketplace, Francisco Fernandes’s in-laws were extremely well-placed. When his first wife died, he remarried, this time the daughter of another familiar of the Inquisition.⁴¹

Evidence about his commercial activities is quite scarce until after the Restoration, although we know that in 1637 he acted as attorney for his cousin, Sebastião Dias Madeira, a senhor de engenho living near Olinda in Pernambuco.⁴² Like most merchants of the period, Francisco Fernandes made ample use of his many relatives to transact his business, and the paths of their careers are closely intertwined with his. His nephew, Martim Gonçalves do Souto, a Lisbon businessman (and probably brother of Brazil Company director Gaspar Gonçalves do Souto), grew up in his house in Lisbon.⁴³ Francisco’s brother, Mateus Fernandes (father of Martim), had emigrated to Paraíba where he became a lavrador de canas and, evidently, a man of some importance in the community there since he served as juiz do povo. Apparently, Mateus sent his son to Lisbon to live with Francisco during the years of the Dutch occupation of Paraiba. It is not clear if Mateus left or not; if so, he returned after the Dutch abandoned the captaincy, because he was living there in 1660.⁴⁴ Although there is no concrete proof, in all likelihood Francisco Fernandes Fuma acted as his brother’s attorney and factor in Lisbon, since that was the usual pattern in such a situation. Martim Gonçalves do Souto also became a familiar of the Inquisition.

After the Restoration, Francisco Fernandes involved himself in a variety of commercial interests. We know that he figured among the major shippers of wine to Brazil, one of the more profitable westbound commodities. Perhaps his Madeiran origin predisposed him to this branch of trade, for in the seventeenth century Madeiran wine was prized and priced above all others in Brazil, because its higher alcoholic content and the process of its manufacture rendered it less subject to the spoilage that took a high toll of the wine shipped from Portugal and the Azores.⁴⁵ Francisco Fernandes’s connections on the island were evidently not influential enough to insure against harassment by Madeiran officials, since in 1644 he and four other traders petitioned the Crown to intercede in their behalf. They alleged that they regularly dispatched ships hired at their expense from Lisbon to Madeira, where wine was loaded for shipment to Bahia and Rio de Janeiro. With the proceeds of the sale they bought sugar which was then brought back to Lisbon. They asked for an aleará to prevent any official from interfering with the voyages of ships contracted by Lisbon merchants to carry wine to Brazil, or from embargoing the vessels and forcing them to return to Lisbon, or to go to the Azores to load wheat, or to any other place. The other signers of this petition were: Gaspar Pacheco, Duarte da Silva, Thomé Botelho da Silveira, and Francisco Botelho Chacão, all of whom, as we have noted, were later officials or major investors of the Brazil Company.⁴⁶

The Dutch occupation of Angola and the Mina coast of Africa offered another opportunity that Francisco Fernandes Fuma did not allow to pass. These two areas supplied Brazil with almost all of the slaves needed to work the sugar and tobacco plantations. With the source of supply shut off, Brazilian planters clamored for slaves to replace those who died and to expand their operations, and the price for the restricted supply available climbed sharply. To circumvent this problem and to take advantage of it, in January 1643 Francisco Fernandes proposed sending a ship to Mozambique in East Africa (which was still unmolested by the Dutch) to acquire slaves in trade for textiles and other “drogas.” The slaves would then be taken to Brazil to serve on the sugar plantations. The Treasury Council considered this an excellent suggestion and recommended its approval, to which D. João agreed. Gaspar Pacheco and others unnamed joined Francisco Fernandes Fuma in this project, the concrete results of which are unknown.⁴⁷ However, we may assume that the venture was reasonably successful since Gaspar Pacheco and another partner requested and received another license for a similar expedition in October 1644.⁴⁸

Very little emerges from the documentation about the later personal life of Francisco Fernandes Fuma. He probably died about 1655, since the latest document in which he appears is dated July 27, 1654.⁴⁹ There is no indication that he had children from either of his two marriages. The symbolic capstone of his career came in 1648 with his admission to knighthood in the Order of Christ, the wealthiest and most prestigious of Portugal’s three military orders.⁵⁰ Along with the habit of the order, he received the promise of a pension of fifty milreis from the patrimony of the Order.⁵¹ Clearly he had come a long way, socially and economically, from his origins as a tenant fanner’s son on Madeira.

It is significant that two other Old Christian directors of the Brazil Company also came from the same island. Overpopulated and its sugar industry in decay, Madeira sent out a steady stream of emigrants in the seventeenth century, not only to Brazil and other Portuguese colonies, but also to the mainland, especially to Lisbon. These emigrants constituted a sort of gentile Diaspora, and family ties and friendships originating on the small island endured and formed the basis for a network of commercial relationships.

Manuel Martins Medina and Matias Lopes were both contemporaries of Francisco Fernandes Fuma, and all received their commissions as familiars of the Inquisition in the same year, 1639. Both men were sons of artisans. Manuel Martins Medina’s father emigrated from the Algarve to Madeira, where he married the daughter of a shopkeeper, but he continued to exercise his profession of mariner.⁵²

Matias Lopes’s father, a carpenter, also came to Madeira from the mainland, where he had been born at Maia (an inland town a few miles north of Oporto), the son of a farmer. Once established in Funchal, he married the daughter of a silversmith whose wife sold linens. Matias Lopes married three times to daughters of prosperous artisans.⁵³ He left his third wife a widow sometime before 1660, and when she remarried, it was to none other than Martim Gonçalves do Souto, nephew of Francisco Fernandes Fuma and (probably) brother of Gasper Gonçalves do Souto.⁵⁴

By 1638, Matias Lopes had become one of the principal Lisbon importers of Brazilian sugar, for in that year he signed a petition with several other businessmen complaining of the lack of a scale at Bahia. Among the other signatories we find several familiar names, including: Duarte da Silva, João Guterres, and Gaspar Pacheco.⁵⁵

Of course, not all Old Christian merchants became familiars of the Inquisition. One of those who did not was Gaspar Pacheco, whom we have already mentioned in several contexts. Of the men considered here, he is the only one to have been born into a family of merchants. His father, Sebastião Fernandes, grew up in a village in the district of Maia, near Oporto, and married Anna Pacheco, the daughter of an Oporto merchant, Gaspar Gonçalves Pacheco. Sebastião Fernandes settled in Oporto, becoming a merchant and dealer in arms and munitions. His brother-in-law, Sebastião Pacheco, was also a merchant and a familiar of the Inquisition. The younger Gaspar Pacheco followed the example of the rest of his family and went into trade, but broke with tradition by setting up his residence in Lisbon.⁵⁶

We have already discussed a few of his many commercial interests: sugar from Bahia, wine from Madeira, and slaves from Mozambique. The earliest reference to his trading activities dates from 1635, when he obtained a license from the Treasury Council to send a German ship hired in Lübeck from Lisbon to Bahia with a half-Portuguese, half-foreign crew. The accompanying receipt for the license refers to him as a “comissário,” which indicates that he was acting on behalf of other unnamed parties.⁵⁷

By the time D. João IV assumed the throne, Gaspar Pacheco had clearly made his mark in the Lisbon business world, but the restoration of Portuguese independence brought him certain additional material benefits in its train. In July 1641 a group of nobles, clerics, and rich businessmen conspired to depose D. João and return the crown to the Spanish Hapsburgs. Among those arrested in the plot was Simão de Sousa Serrão, fundidor (“chief administrator”) of the Lisbon mint.⁵⁸ D. João then named Gaspar Pacheco to the vacant office on August 11, 1641.⁵⁹ In all probability, Gaspar Pacheco had figured among the early financial backers of the Braganza claimant and received the office as his reward. He certainly advanced substantial sums of money to the Crown in later years. In 1643 he lent 2,000 cruzados to the treasury,⁶⁰ and in 1648 he took over the task of supporting the Portuguese embassy in Holland while his predecessor, Baltazar Rodrigues de Matos (later a director of the Brazil Company), rendered accounts to the royal fisc.⁶¹

There survives a relatively large amount of documentation about Gaspar Pacheco, but his will, dictated three-and-a-half years before he died in 1657, gives the best indication of the range and magnitude of his activities. A large portion of his accumulated wealth went into real estate, including three country properties near Lisbon in Cascais, Algés, and Santiago dos Velhos, worth in all at least 8,000 cruzados. In Lisbon he owned a warehouse valued at 300 cruzados, a shop appraised at 1,000 cruzados, and several houses together worth 5,000 cruzados, in addition to his own dwelling which had cost 10,000 cruzados when he bought it. Besides these properties, he owned others on foro⁶² in Lisbon, Oporto, and Sintra on which he annually collected a pension of fifty-eight cruzados and a chicken. His property was not confined to Portugal, however, and in Pernambuco he owned one engenho and half of another. Both evidently suffered during the Dutch occupation, but he valued the first even in its damaged condition at 20,000 cruzados; the second had belonged partly to Miguel Amao, a relative (husband of his cousin), whose half had been sold at auction for 14,000 cruzados when he died. However, apparently because of a debt settlement, the buyer’s share was reduced to only 5,000 cruzados, leaving Gaspar Pacheco with an interest of 23,000 cruzados. Another property mentioned, but not appraised, was his quinta in suburban Sete Rios. The total stated value of his real property comes to 67,300 cruzados, not including the market value of the foros.

Except for the Brazilian sugar plantations, all of these properties went into an entail bequeathed to his eldest son, António Rodrigues Pacheco, as administrator. The annual income from the entailed property amounted to some 450 milreis or 1,125 cruzados, plus eight moios⁶³ of wheat, two moios of barley, one sheep, one chicken, four loads of straw, and some cheese pastries—not a princely allowance perhaps but enough for a very comfortable existence. Along with this morgado went the administration of the chapel of Nossa Senhora das Angustias, endowed by Gaspar Pacheco in the Benedictine monastery at Lisbon, where he was eventually buried. The value of the chapel’s endowment was not stated, but he had spent more than 3,000 cruzados in its decoration.

The future administrators of the morgado were enjoined to obey the terms of its foundation on pain of losing possession. Foremost among these conditions was that which forbade the administrator to marry “a New Christian woman or any who has the blood of any other contaminated race or any who is the daughter of a peão or artisan or of anyone, even with a patent of nobility, who is in the service of another person, even a noble of great estate and quality.” Similarly, Gaspar Pacheco specifically excluded clerics, knights of Malta, monks, and nuns from ever entering into possession of the entail.⁶⁴

Here, perhaps, is a clue to the prejudices and self-image of a wealthy Old Christian merchant-banker. Clearly, despite his myriad commercial associations with New Christians, he certainly did not want his grandson (or granddaughter) to marry one. No doubt somewhat apprehensive and unsure of his newly-recognized gentility (his coat-of-arms having been granted only in 1647 and his knighthood in 1645),⁶⁵ he showed a parvenu’s anxiety to avoid any mésalliance that might cast further doubts on the legitimacy of his pretensions. At tire same time a certain rugged pride in his origins and self-made fortune shows through in his prohibition of any marriage with retainers of the nobility; obviously he did not want people to think that his family reached its position through the route of sycophancy. While ready to present the Church with a grandiose obra pia in the form of a chapel (which, not incidentally, was also designed to reflect his family’s glory, emblazoned as it was with the new coat of arms), he had no intention of allowing his accumulated wealth to fall into the Church’s dead hand.

At the time he made his will, probably the greater portion of Gaspar Pacheco’s capital was actively invested in loans and merchandise. He did not list the merchandise shipments that he had dispatched within Portugal or overseas, because, as he put it, “they depend on the vagaries of time and the weather for their growth or diminution.” To assess them his executors would have to consult his book of accounts. The same held true for his debts and loans since they were “so diverse, with many different people, and change every day.”⁶⁶ After his death, his heir probably liquidated most of these assets and quite possibly withdrew much of the capital from circulation, since there is no evidence that Antonio Rodrigues Pacheco ever actively engaged in commerce. Perhaps some of his resources were employed by his cousin’s husband, Henrique Nidrote, a businessman and co-executor of Gaspar Pacheco’s estate. However, António Rodrigues Pacheco adopted the genteel life-style that his father’s wealth made possible.

III

The biographical material presented above affords a new perspective not only on the circumstances of the Brazil Company’s foundation, but also on the nature of the Lisbon mercantile elite.

First of all, the establishment of the Brazil Company appears in quite a different light when we know that several of its major investors and directors were Old Christian merchant-bankers. Certainly one cannot ignore the connection between the alvará exempting the New Christians from the threat of confiscation and the foundation of the Company one month later. Clearly the New Christians wished to obtain guarantees against one form of persecution practiced by the Holy Office, and the Crown was just as eager to secure their capital to protect its interests. But were these the only considerations? Did the initiative to form the company come, as previous studies suggest, only from the Crown (i.e., from Vieira), which offered the merchants the long-sought exemption as the only means of inducing them to invest their capital in the company? If so, how do we explain the investment of money and personal energy by Old Christian merchants who had absolutely nothing to gain from the exemption since they were in no way threatened by the Inquisition’s powers of confiscation?

It is evident that they saw the proposed company as a promising investment opportunity, a chance to emulate the success of the Dutch East and West India companies that had succeeded in wresting away so much of Portugal’s former trading empire. One must assume that the New Christian merchants found similar attractions in a trading company which controlled all shipping to and from Portugal’s most profitable colony and enjoyed a monopoly of the four staple exports from the metropolis to Brazil: wine, olive oil, wheat flour, and codfish. It is hard to believe that much of the impetus to found the company did not come from the mercantile community itself.

Indeed, there is some evidence that a group of Lisbon merchants on their own initiative took steps in that direction shortly before the organization of the Brazil Company. In a letter written September 6, 1648, D. João informed his ambassador in Paris, the Marquês de Niza, that “the residents of Pernambuco have shown such industry that, through their attorneys, they have made an agreement with the greatest businessmen of [Lisbon], by which the latter are obliged to provide twelve armed ships continuously through the course of the year . . . to the captaincies of the North, with provisions, munitions, clothing, and everything necessary for human life.” The Ambassador’s reply indicates that a monopoly of the wine trade was part of the arrangement obtained by the merchants, an intriguing foreshadowing of the Brazil Company’s privileges.⁶⁷ The names of the merchants involved in the agreement remain unknown, but if they were the “greatest” in Lisbon, they must certainly have included at least a few of the future directors of the Brazil Company which was quickly to supersede this earlier undertaking. In this contract, it is plain enough that the Crown and the question of exemption played little or no part; the incentive was a virtual monopoly of sugar trading and metropolitan exports that the Brazil Company later enjoyed on a much grander scale.

The theory that such considerations were the principal motivations for the company’s foundation is strongly supported by the history of cooperative ventures of mutual benefit to the Crown and the merchants who undertook them. A few of these have already been mentioned, but the 1646 contract to supply the armies on the Spanish border deserves special attention because of the partners in the agreement: Francisco Fernandes Fuma, Diogo Rodrigues de Lisboa, Jorge Gomes Alemo, Gaspar Pacheco, Afonso Serrãre de Oliveira, João Moreira, Baltazar Rodrigues de Matos, Matias Lopes, Jerónimo Gomes Pessoa, João Guterres, Francisco Dias de Leão, António Lopes Soares, and Matias Dias. This fist shows an extraordinary correlation with the directors and major investors of the Brazil Company previously identified. Even the sum involved is strikingly, if coincidentally, similar: 1,160,000 cruzados for the supply contract vs. about 1,300,000 cruzados invested in the Brazil Company.⁶⁸ Clearly these men were accustomed to dealing in joint ventures requiring investment of great amounts of money; the Brazil Company was no novelty in this sense.

From the perspective of defense contracts in the national interest, it was a very short step from supplying the armies on the Spanish frontier to organizing the Brazil fleets. In both cases the Crown granted a monopoly to interested groups of businessmen who received their repayment in the first instance from liens on specific tax revenues and in the second case from part of the sugar duties, revenues from freight and convoy charges, and the company’s monopoly on certain foodstuffs. Of cotuse, the Brazil Company represented a departure in institutional form, but, as we have seen, the men who undertook the supply contracts were the same ones who financed and administered the Brazil Company, and they were by no means exclusively New Christians. In this sense, the Brazil Company was simply one more in a long series of contracts authorized by the Crown for reasons of state and underwritten by businessmen for motives of profit. It seems reasonable to infer that the alvará of exemption was not a precondition imposed by New Christian merchants for their support of the Brazil Company. The profit-making prospects of the company were promising enough to attract New Christian capital without this incentive, just as they attracted Old Christian capital.

In that case, why was the exemption proposed in connection with the issuance of the company’s charter? A number of motives existed, but the principal reason undoubtedly lies in the struggle following the Restoration between the Jesuits and the Inquisition. The origins of the dispute remain somewhat obscure, but it quickly escalated into a no-quarter battle of paramount importance involving the survival of the Braganza dynasty on the Portuguese throne. The Jesuits, led by Vieira, emerged as champions of Portuguese independence, whereas the Holy Office sought to topple D. Joäo both openly, in the conspiracy of 1641, and surreptitiously, by systematically attacking the financial underpinnings of the restored monarchy.⁶⁹

In this context, the controversy over the exemption makes perfect sense. By pressuring D. João to approve the exemption, Vieira struck at the very existence of the Inquisition, which depended on its confiscations to survive as an institution. The Holy Office recognized the gravity of this threat and retaliated in the only way it could, arresting some prominent New Christian supporters of D. João and opposing the Brazil Company as an alliance with minions of the Anti-Christ. The pressing need for such a company to protect the sea route to Brazil allowed Vieira to couch his proposals in terms of practical patriotism, while the Inquisition disguised its maneuvers against the Crown (and hence the Jesuits) by denouncing the proposed company on religious grounds.⁷⁰

The issue of the exemption, therefore, had a life of its own, quite apart from the question of whether it was necessary in order to pry the New Christian merchants loose from their money to finance the Brazil Company. Clearly it was not necessary. The Brazil Company was not simply a bribe to the Crown from New Christian merchants in order to obtain a privilege. It was an organization which promised to yield a profit to its investors, based on mercantile principles proved viable in Northern Europe, but never before applied in Portugal. As such, it attracted capital from Portuguese merchant-bankers, a considerable number of whom were Old Christians.

The biographical data on these individuals also allows an insight into the nature of the Portuguese mercantile community of the mid-seventeenth century. The obvious question remains: How representative were these men of their class?

One must bear in mind that the number of merchant-bankers in Lisbon was quite small. Their number would never, of course, have remained constant, but for the reign of D. João IV (1640-1656), we have identified thirty-nine men who clearly belonged in the category of assentista (that is, wealthy homens de negócio who assumed Crown contracts or loans). Among them are all the men who have been identified as major investors and administrators of the Brazil Company.⁷¹

Our emphasis on Old Christians in this elite circle should not create the impression that they constituted a majority of that class, for such was clearly not the case. On the other hand, the error of regarding the Lisbon haute bourgeoisie as exclusively New Christians should now be equally apparent. Of the thirty-nine merchant-bankers of D. João IV’s reign, we can positively identify twenty-three as New Christians, ten as Old Christians, and six uncertain. In other words, Old Christians comprised from one-fourth to one-third of the Lisbon merchant-banker class, which is to say the Portuguese merchant-banker class.⁷²

Whether or not a like proportion obtained among homens de negócio is somewhat more difficult to determine with certainty. Again to cite D. João IV’s reign, we have identified some 125 Lisbon homens de negócio (there may well have been others) of whom we know the “quality” of slightly over half. A large majority of the latter group were New Christians, and a bit more than one-fifth of them were Old Christians. However, we are reluctant to place too much reliance on these figures, since the information on the presence or absence of Jewish ancestors comes mostly from Inquisition records which almost certainly skew the evidence in favor of the New Christians. Allowing for this bias and considering the large number of unknowns, we may with some assurance estimate the proportion of Old Christians at one-fourth to one-third of this class as well. A bit of indirect support comes from Padre António Vieira, who in 1647 urged that all businessmen’s goods be exempted from confiscation by any court, “for many are Old Christians and foreigners.”⁷³

The success stories of the men whose careers are outlined above were by no means peculiar to Old Christians. For example, Duarte da Silva, probably the most celebrated New Christian merchant-banker of his day, was the son of a man who had moved from the tiny Alentejo town of Alter do Chão to Lisbon, where he lived meagerly from income on his property, “without any business whatever, having so little capital.” Duarte da Silva’s paternal grandfather had been a petty bureaucrat in Alter do Chão.⁷⁴ Manuel da Gama de Padua, a New Christian director of the Brazil Company, migrated to Lisbon from Louie in the Algarve, where his father was an itinerant merchant.⁷⁵ The circumstances of their marriages and business associations show other similarities to those of their Old Christian colleagues.

One suspects, in fact, that it is often a mistake to think of Portuguese merchants in terms of Old or New Christians. To be sure, the latter had special problems to contend with, but there is no real evidence that their response to the conditions of the Portuguese economy differed from that of Old Christian merchants. Certainly in terms of business associations there was no division of Old and New Christian merchants into separate groups. The numerous examples of partnerships between the two provide ample proof that these businessmen joined in continuing associations involving large amounts of capital without regard to the orthodoxy or antiquity of each others’ faith. Monopoly supply contracts and tax farming were not the exclusive preserves of New Christians, and we have shown that merchants of all stripes participated in trading the same commodities. New Christian merchant-bankers sought (and achieved) the same social goals as the Old: foundation of an entailed estate and a patent of nobility as a fidalgo da casa real or as a knight of the military orders.⁷⁶ Despite the Inquisition’s depredations, Portuguese merchants conducted their everyday business as merchants, not as New or Old Christians.

It is worth emphasizing that these Old Christian merchant-bankers were not fidalgos who dabbled in trade for personal gain, but men who rose from below, frequently from the artisan class, for whom commerce was the immediate source of the wealth that gave them power and prestige. The biographies cited show plainly that mercantile trading represented an avenue of social advancement for Old Christians in the seventeenth century, and ambitious gentiles did not shun the profession because of its association with crypto-Jews in the popular mentality. This does not mean that prejudice against the latter did not exist, even among other merchants. Gaspar Pacheco’s will graphically demonstrates this fact, and the rather frequent incidence of familiars of the Inquisition among Old Christian merchants may well have been a function of their desire to publicly prove the purity of their blood and overcome the undesirable connotations of their occupation. Besides that, the position of familiar carried with it considerable prestige and certain privileges. Familiars were not, of course, clandestine agents; rather they proudly appended the title to their names in all sorts of public documents, including bills of sale and powers of attorney.

There is another element in this as well, for purity of blood was theoretically one of the prerequisites of nobility, and any merchant who desired recognition as a gentleman would find his way considerably smoothed if he could prove the quality of his ancestor’s blood. Forebears who worked with their hands represented another legal obstacle to ennoblement, for which purity of blood could partially compensate. Not infrequently, these merchants’ ancestors had worked at “mechanical” occupations. The opprobrium assigned to such stations in life was less onerous if one could prove membership in a kind of nobility of faith.

Portuguese society may have been highly stratified, but the barriers between the classes were not at all impermeable. Within the space of three, two, or even one generation, a family could climb several degrees up the social scale. Francisco Fernandes Furna’s leap from tenant farmer’s son to knight of the Order of Christ shows a social mobility remarkable even today, but all the more impressive in the seventeenth century. The biographical sketches provide some clues about how these men accomplished this transformation. A fortunate marriage with its accompanying dowry was frequently an essential step in order to accumulate some capital to employ in the marketplace. Since none of these men came from Lisbon, the new in-laws acquired there undoubtedly brought valuable connections in the city.

Like their colleagues elsewhere in Europe, these merchant-bankers did not specialize in any single commodity or in trade with any one area. They dealt in the full range of products traded in the Lisbon marketplace, sending and receiving merchandise and money to and from Brazil, India, or Africa as the occasion arose. By the time D. João assumed the throne, they had already accumulated considerable fortunes, but they only rose to real prominence after the Restoration. As we have pointed out, they numbered among the principal financial supporters of the new king, and their link with the Crown profited them both economically and socially.

Apart from this social mobility, the geographical mobility shown by these men and their ancestors is quite extraordinary. All of the merchants had to make the move to Lisbon, but their parents, grand-parents, and in-laws moved frequently as well. Whether economic necessity or opportunism motivated these migrations is difficult to say. It is evident, however, from these and other cases, that this constant flux was one of the salient characteristics of the Portuguese bourgeoisie of this period. Lisbon, of course, acted as the great magnet that eventually attracted its most adventurous and ambitious members. The evidence suggests that as merchants acquired wealth and higher social status, they and their descendants retired from active participation in commerce, placing large portions of their resources into entailed estates.⁷⁷ Newcomers from the interior, the islands, and other ports then moved in to assume the spaces left vacant in the mercantile community. It is noteworthy that, with the possible exception of Gaspar Pacheco, not one of these men came from families made wealthy by trade in the sixteenth century. All of them were new faces on the scene.

In the light of these data, it is impossible to maintain the widely accepted concept of the Portuguese bourgeoisie without some important revisions. The aspect of the Lisbon mercantile class in the seventeenth century is not merely that of incompletely converted Jews pursuing occupations scorned by other elements of society. Rather, it appears a heterogeneous group of diverse social and geographic origin attracted to commerce as the surest path to wealth and social advancement.

Author notes