Marquês de Pombal

In 1703 Portugal signed the Methuen Treaty with England, giving English woolens preference in Portuguese markets in return for a favorable tariff on Portuguese wines. This seemingly simple arrangement ended the move toward industrial development, drained Brazilian gold out of Portugal, and gave England its increasing dominance over Portugal and Brazil. The gold and diamond chests arriving at the royal treasury in Lisbon immediately were dispatched north to pay for imported cloth and manufactured goods. Local Portuguese producers could not compete with cheaper foreign prices. Furthermore, English vessels anchored in the Tagus River in the Iberian Peninsula snatched large quantities of gold from under the noses of Portuguese authorities. Instead of Brazil's wealth being used to develop Portugal and its colonies, it helped finance the English industrial revolution and Portugal's eighteenth-century struggles to secure Brazilian boundaries.

Even though an immense amount of wealth was sent abroad, much stayed in Brazil to build urban public works, such as fountains, bridges, buildings, and churches; to endow some charitable foundations, such as hospitals; and to finance the elaborate contraband trade with the Río de la Plata and Alto Perú (Upper Peru, or present-day Bolivia). However, it did not improve the condition of the poor; generate a prosperous middle class; improve agriculture, education, or industry; or produce lasting reform.

In 1732 António Rodrigues da Costa, a member of the Overseas Council, warned the crown that the heavy colonial taxes would one day lead the colonists to cast off their loyalty. It was obvious to Rodrigues da Costa that the "larger and richer" would not accept forever being ruled by the "smaller and poorer." In 1738 royal adviser Dom Luís da Cunha suggested secretly to King João V that he take the title "emperor of the west" and move his court to Rio de Janeiro, which he argued was better situated than Lisbon to control the Portuguese maritime and commercial empire. Rather than heed such advice, however, the monarchy tried at mid-century to gain more control, stop the massive outflow of gold, and contain the British.

Beginning in 1755, Marquês de Pombal (Count Sebastião José de Carvalho e Melo), as secretary of state for overseas dominions, shaped a series of reforms that gave chartered companies a monopoly of the Brazil trade, encouraged national manufacturers, and worked to make commercial relations with Britain less dependent and more reciprocal. His goal was to revitalize the state and to break the stranglehold of British credit. He closed Brazilian ports to all foreign ships and hired foreign military experts to organize Brazil's defenses. To promote agricultural growth, Pombal distributed coffee and mulberry seedlings and also advocated production of indigo, flax, cotton, cocoa, and rice. Iron mining and smelting got underway in São Paulo, and shipbuilding and its attendant trades in Bahia and Rio de Janeiro increased. With the British seizure of Havana and Manila during the Seven Years' War (1756-63), the Portuguese wondered if Rio de Janeiro would be next. The crown responded with four goals: secure the borders, populate them for self-defense, defend the ports, and make the mines profitable.

Pombal distrusted the Jesuits, who controlled vast areas in the interior of South America. He suspected commercial links between their prosperous missions and the British, and in September 1759 expelled them from Brazil. The expulsion of the Jesuits caused the missions to fall to ruin and eliminated the strongest educational institutions in Brazil. Crown policy forbade any university or even a printing press in the colony, and modern Brazilian universities date only from the 1930s.

The crown's education policy was based on the idea that colonial and metropolitan elites would blend to shape an imperial elite united by ideology in support of the crown. During the colonial era, 3,000 Brazilians studied at Portugal's University of Coimbra, which in 1772 Pombal reformed with Enlightenment perspectives. Between 1772 and 1785, 300 Brazilians, many from Minas Gerais, were at Coimbra. Pombal placed these graduates and other members of the colonial plutocracy in judicial, administrative, and military posts. However, policy intention and outcome often clashed. Some of these students and officials would begin to think in terms of independence.

The production of gold began to decline about 1750 as the Minas Gerais society was solidifying and as the international situation was becoming more complicated. The more the Portuguese squeezed and tried to reduce the contraband in gold and diamonds, the more the divergence of interests grew. In the 1770s, as less gold reached royal coffers, the crown reacted by imposing a per capita tax (derrama ) to make up the difference between the amounts expected and those received. Meanwhile, competition from British, French, and Dutch colonies pushed the price of Brazilian sugar down lower on the Amsterdam market, reducing still more Portuguese revenues. Moreover, the decline in available gold affected the contraband trade that the Brazilians had carried on with the Río de la Plata area, where they exchanged their illicit gold for Andean silver. The Brazilians then used the silver to buy illegal British goods, which they smuggled back into the Spanish domains.