Money in Brazil - from Discovery to The United Kingdom
Money in Brazil - from Discovery to The United Kingdom
The First Coins
At the beginning of the colonial period, Brazilian monetary mass was formed in an unplanned way with coins brought by colonizers, invaders and pirates who traded in the Brazilian coast. Then, side by side with Portuguese coins, circulated money of different nations, with their equivalence based on their intrinsic value (metal content).
From 1580 onwards, with the establishment of the Iberian Union, a large inflow of Spanish silver coins (reales) took place coming from Peru, resulting from the flourishing trade developed through Rio de la Plata. Until the end of the 17th century, the Spanish reales were the most expressive part of the money circulating in Brazil.
Portuguese coins circulating in Brazil were the same as the ones in the Metropolis, coming from different reigns. Minted in gold, silver, and copper, the coins had its values expressed in Réis and had at times particular names, such as Português, Cruzado, São Vicente, Tostão, and Vintém. The coin of one Real, unit of the monetary system, was minted in copper.
Countermarked Coins
The long war against the Spaniards, after restoration of the Portuguese independence, cost high sums to the Portuguese crown. To obtain the necessary funds, Dom João IV (1640-1656) and Dom Afonso I (1656-1667) resorted to successive changes in the monetary standard, determining reduction in the weight of minted coins and increasing the face value of coins into circulation. Later on, during the reign of Dom Pedro (1667-1706), further increments in the face value of coins were made.
In some occasions, these increases were made without change in the coins themselves; in other, the increase was made by applying countermarks (stamps). Then, several gold and silver Portuguese coins and Spanish reales circulating in the reign and provinces were countermarked.
In order to apply those stamps, the crown established temporary monetary workshops in the main Brazilian Capitanias, operating only during the stamping periods.
Marks to Avoid Clipping
Adulteration of gold and silver coins by the illegal practice of shaving off the edges to remove metal (clipping) assumed disastrous proportions in Portugal and its territories, leading Dom Pedro II to adopt measures to avoid the clipping. Among such measures, there was the putting of string (a sort of serration in the form of string) and mark (crowned armillary sphere placed close to the rim) and minting of new edges in already minted coins.
Commodity Money
During the two centuries following the discovery, given the lack of a special monetary policy for the Colony, the quantity of coins in circulation revealed insufficient to cover local needs. For this reason, different commodities were used as money, even by the government, and payments were made in sugar, cotton, tobacco, iron, cocoa, and cloves, among other means.
In some occasions, the use of commodities as money followed legal determinations. In 1614, for instance, the governor of Rio de Janeiro established sugar as legal tender, determining traders to accept sugar as payment. In the state of Maranhão, a state politically separated from Brazil where the main legal tender was cotton, circulation of sugar, cocoa, clove and tobacco was legally established in 1712 as money.
African slaves coming to Brazil used in their exchanges the zimbo, the shell of a mollusk found in the Brazilian coast and that circulated as money in Congo and Angola.
Netherlands Coins
Besieged by the Portuguese in the Pernambuco coast, and having no money to pay their soldiers and suppliers, the Netherlanders made the first minting of money in Brazilian territory. Known as obsidional coins or besiege coins, whose were also the first ones to bear the name of Brazil. For lack of appropriate tools and adequate materials, as well as the urgency of the work, the coins were made in a very rudimentary way.
In 1645 and 1646, gold coins of III, VI and XII florins, and in 1654, little before Netherlanders departed, silver coins of XII, X, XX, XXX, XXXX solds were minted, although authenticity of the four last values is disputed. The coins bore an inscription G.W.C., corresponding to the Dutch initials of the West Indies Company.
The First Mints
In the two last decades of the 17th century, the lack of coins in Brazil became severe, affecting the operation of the economy and resulting in sharp decline in the Crown’s income. Several letters, asking for a solution to the problem, were sent to the king by general governors and governors of the Capitanias, representatives of the chambers and members of the church and noblemen. In 1694 Dom Pedro II finally decided to establish a house in Bahia to mint provincial coins.
All gold and silver coins circulating in the colony should be sent to the Mint to be changed into provincial coins. This brought a problem for other Capitanias for the difficulties and risks of transportation. Then, to meet the needs of the population, the Mint was transferred in 1699 to Rio de Janeiro and in the following year to Pernambuco, where it operated until 1702. In 1703, ordered by Dom Pedro II, the Mint was again established in Rio de Janeiro, not with the purpose to struck provincial coins, but to transform gold into coins for the kingdom.
Gold coins of 4,000, 2,000, and 1,000 Réis and silver coins of 640, 320, 160, 80, 40, and 20 Réis were minted. The set of silver coins is known as the Pataca series, after the name Pataca, attributed to the 360 Réis coin.
Copper Angolan Coins
As the Brazilian mints did not struck copper coins, some Angolan coins minted in the city of Porto and originally destined to Angola received authorization to circulate in Brazil, in the values of 10 and 20 Réis.
Gold Changes into Coins
In the first half of the 18th century, a large gold production made possible the simultaneous operation of three mints in Brazil and the coining of a large amount of pieces the values and beauty of which are testimony of the wealth achieved in the reign of Dom João V (1706-1750).
At the beginning, the mints of Rio de Janeiro (1703) and Bahia (1714) struck coins identical to those of the Kingdom: moeda (coin), meia moeda (half coin) and quartinho (quarter), with face values of 4,000, 2,000 and 1,000 Réis. Although they had the same name as provincial coins, those pieces had higher weight and their circulation value was 20% above their face value.
The prohibition of circulation of gold in powder within the Capitania in 1720 determined the establishment of a mint in Minas Gerais. Besides coins identical to those minted in the Kingdom, in Rio de Janeiro, and Bahia, the new mint should also strike pieces with face values of 20,000 and 10,000 Réis, that would circulate with effective values of 24,000 and 12,000 Réis. Established in Vila Rica, the Minas Gerais mint operated from 1724 to 1734.
In 1722, Dom João V changed the shape and value of Portuguese gold coins, creating the Escudo series with the values of 12,800 Réis (Dobra of 8 Escudos), 6,400 Réis (Dobra of 4 Escudos), 3,200 Réis (Dobra of 2 Escudos), 1,600 Réis (Escudo), and 800 Réis (half Escudo). Minted in Brazil from 1727, these coins bear in their reverse the king’s effigy. This series came to include, in 1730, a 400 Réis piece (Cruzadinho).
Gold Coins of Dom José I and Dona Maria I
Coinage of the Escudo series continued during the reigns of Dom José I (1750-1777) and of Dona Maria I (1777-1805) with the exception of the 12,800 Réis piece, suspended by Dom João V in 1732. Provincial gold coins of 4,000, 2,000 and 1,000 Réis resumed their coinage, suspended since 1702.
In the Dona Maria’s Escudos, the effigies display two different phases of her reign. In the first one, she appears at the side of her husband, Dom Pedro II. After Dom Pedro II died in 1786, she is depicted alone, first wearing a widow veil and after with jewel and ribbon hairdressing.
Coins of the "J" Series
In 1750, Dom José prohibited circulation of gold coins in mining regions, considering that transactions on that counties could be effected through marked gold ingots and gold in powder. To meet the needs of the small trade in the region, Dom José ordered the mints of Rio de Janeiro and Bahia to struck silver and copper provincial coins.
However, in 1752, following a suggestion made by the governor of the Minas Gerais Capitania, Dom José determined the minting of silver coins with values of 600, 300, 150, and 75 Réis, since prices in the mining regions were established based on eights and its submultiples, where an eighth of gold before the quinto (tax on gold) valued 1,200 Réis.
To avoid confusion with the provincial 640, 320, 160, and 80 Réis silver coins, given the proximity of values, the escutcheon with the arms of Portugal was replaced in the new coins by a crowned "J".
18th Century Copper Coins
During the reign of Dom João V, the Lisbon Mint produced purposely 10 and 20 Réis copper coins to be used in Brazil. Coins with the same values were struck also by the Bahia Mint, which in 1729 minted the first copper coins in Brazil.
In 1730, 20 and 40 Réis copper coins minted in Lisbon in 1722 reached Minas Gerais, with greatly reduced weights, to circulate only in that Capitania.
In the reign of Dom José I, came to circulate provincial copper coins of 5, 10, 20, and 40 Réis minted in Lisbon and Brazil.
Under the rule of Dona Maria I, there was no minting of copper coins in Brazil. All such coins were made in Lisbon, keeping at the beginning the same weights and values they had in the previous period. However, in 1799, under Dom João, copper coins suffered a reduction of 50% in their weight.
Extraction Bills - The First Paper Money
From 1772, extraction of diamonds in the region of Tejuco do Serro Frio (currently Diamantina) came to be performed directly by the Portuguese Crown, that established the Royal Extraction of Diamonds for the purpose.
When there were no funds to make payments, the Diamonds Administration issued bills that were redeemed as soon as coin supplies arrived from the Royal Treasury. At the beginning, the bills were highly valued and accepted in all commercial transactions in the region.
Coins for Maranhão and Grão-Pará
In 1748, Dom João determined the minting of provincial gold, silver and copper coins for the State of Maranhão and Grão-Pará, totaling 80 Contos de Réis. Minted in 1749 by the Lisbon Mint, the coins had the same denominations and weights of the Brazilian provincial coins.
According to witnesses of that time, the introduction of these coins caused great confusion in the State, since the prices of salaries and other goods were fixed in terms of cotton and spices.
Gold Bullion and Certificates
With the purpose of securing collection of the quinto (one fifth) tax, foundries were established in the main gold mining regions of the country, to where all of the gold extracted should be sent.
After deducted the fifth, the gold was founded, made into ingots, and struck the year, hallmark of the foundry, order number, and gold title and weight. Once legalized, the gold was returned to its owner with a certificate.
These ingots had wide circulation within Brazil, with the function of money, particularly in the interior Capitanias.
The Coin of 960 Réis
A decline in the Brazilian gold production led Dom João to forbid, in 1808, circulation of gold in powder, with the aim of checking its embezzlement that was carrying great harm to the crown. All gold in powder should be sent to foundries; those parts weighing one ounce (28.6875 g) or more would be founded into ingots, and those of lower weight would be redeemed for coins.
To supply the mining regions with money, circulation of gold coins, forbidden since 1750, and nationalization of the Hispano-American silver coins were authorized.
Spanish pesos (8 reales), worth between 750 and 800 Réis, received a stamp of 960 Réis, starting in the Minas Gerais Capitania and later on in the Capitania of Mato Grosso.
In 1809, a provincial coin of 960 Réis was established, with its minting starting in 1810.
Escutcheon Stamps
To make uniform the money circulating within Brazil, where coins of the same metal and weight had different values, Dom João determined, in 1809, affixation of a escutcheon stamp in coins of the "J" series to make them even to the ones of the Pataca series, and also in copper coins minted before 1799, to double their values.
Dom João, Prince Regent and King
Although Dom João had assumed the regency in 1799, for some years coins kept being minted with the name of Dona Maria I. The first gold coins minted with the inscription João Príncipe Regente [João Prince Regent] were made in 1805, before his arrival to Brazil.
The elevation of Brazil to the condition of United Kingdom was registered in gold, silver, and copper pieces minted in 1816 with the inscription João, por Graça de Deus, Príncipe Regente de Portugal, Brasil e Algarves [João, by the Grace of God, Prince Regent of Portugal, Brazil and Algarves].
With the acclamation of Dom João as Dom João VI, in 1818, coins came to bear the arms of the United Kingdom and the inscription João VI, por Graça de Deus, Rei de Portugal, Brasil e Algarves {João VI, by the Grace of God, King of Portugal, Brazil and Algarves].
Change for Gold in Powder
Given the lack of small value coins to be used as change for small quantities of gold in powder, Dom João established that change could also be made with bills printed in values of 1, 2, 4, 8, 12, and 16 Vinténs of gold, corresponding each Vintém to 37½ Réis. Issued in great quantity, the bills circulated freely in the Capitania of Minas Gerais as part of the monetary mass. Later on, for the great number of falsified bills, their issue was suspended.
In 1818, copper coins in values of 75 Réis and 37½ Réis were issued to operate as change for gold in powder.
Banco do Brasil Notes
The establishment of Banco do Brasil, by a charter of October 12, 1808, had the main aim of giving the crown an instrument to raise the necessary funds to maintain the court.
According to its bylaws, the bank should issue bills payable to the bearer, with values of 30 Réis and higher. The issues by Banco do Brasil begun in 1810, and in 1813 bills with values lower than the minimum limit initially set were issued.
Between 1813 and 1820, bills issued by Banco do Brasil aggregated 8,566 Contos de Réis, in great part determined by the supply of paper money to defray the increasing expenses of the court and crown administration, that exceeded the revenues collected each year. From 1817, the bills began to loss credibility and were greatly devaluated.
In April 1821, before returning to Portugal, the king and his court redeemed all bills they possessed, exchanging them for coins, metal and jewels deposited with Banco do Brasil, making the institution to suspend, effective from July, convertibility of the bills.