Rebirth of an Empire "O Renascimento de um Império" v2.0

[Archangel]

Good to see new universities and polytechnics being created earlier.

 

[Johannes Parisiensis]

To further streamline the model and enhance staffing possibilities, a four-years-four-classes system was implemented, scheduling rules were agreed upon, volunteer programs were established, contract programs were signed and, finally, primary magistracy schools were founded in urban centers to train teachers for elementary schooling. It took several years for a gradual optimization of all these programs to take place, but by 1783, the time of Pombal’s death, teachers were being reliably supplied to both cities and countryside.

It would be interesting to know when will most of the adults be literate in the cities and the countryside, given the political effects of widespread education (literate persons tend to be more contestative).

And tracking it by territory might give more informations about the level of political enlightenment in the several areas of the Portuguese Empire.

Many old convents and Sunday schools from the old Jesuit orders were absorbed into this program, which sparked concern amongst the remaining, semi-secularized orders, as it created a precedent of infrastructural assimilation by the state. The question of private versus public schooling began gaining tract overtime, further broadening the political horizon in the country and the fight between conservative and progressive ideals.

Is the government trying to save money overseas, by letting more private persons (churches, Hindu temples and Buddhist monasteries) open schools?

This network of colleges in the metropolis was significantly productive, printing out papers on their respective fields yearly together with new generations of educated privileged men. By 1783 reputation had risen well enough, with the hiring of foreign teachers becoming significantly easier and the inlet of students growing more diverse.

This might come handy for the Industrial Revolution.

 

[Lusitania]

Good to see new universities and polytechnics being created earlier.

Yes they are logical next steps in the expanding higher learning initiatives and government policies.

It would be interesting to know when will most of the adults be literate in the cities and the countryside, given the political effects of widespread education (literate persons tend to be more contestative).

And tracking it by territory might give more information about the level of political enlightenment in the several areas of the Portuguese Empire.

That information is very easy to obtain since Portuguese administrators were very meticulous in record keeping including those that were literate and those that were illiterate. We will provide some initial information at the end of the decade as part of the 18th century review. iOTL the Portuguese did maintain similar and very complete demographic information on each province and colonies. So we just need to ta into the similar data.

Is the government trying to save money overseas, by letting more private persons (churches, Hindu temples and Buddhist monasteries) open schools?

No similar style as Metropolitan Portugal with education being directed by Portuguese government officials to promote language and universal Lusophone identity. We will be talking about Catholic Church and religion later when we have several sections dedicated to the changing role of the religion in the country.

This might come handy for the Industrial Revolution.

Yes it did provide many "ideas" and knowledge that astute businessmen used to exploit and increase industry in. As the years progressed they provided new knowledge that could be applied.

 

[Lusitania]

Rebirth of Empire (Part 2 of 2) (Cont.)

The Last Years of Pombal (1777-1782) (Cont.)​

Ministry of Finance & Commerce (1 of 2)​

The Ministry of Finance and Commerce proved its vital importance to the nation through the revitalization of Portugal’s industrialization and financial evolution. The post-Ratton economy was fundamentally more efficient than the pre-Ratton coffers controlled by Pombal. The needs of the new productivity, however, presented extraordinary challenges that needed an experienced mind to answer, so Jacques Ratton also remained in the cabinet after King Joseph I’s death.

Jacques Ratton
Born 7 July 1736
Died 3 July 1820
Franco-Portuguese Businessman, Economist, Knight of the Order of Christ and Statesman​

Jacques Ratton was comfortably positioned in the government despite the pressure he was in to ensure the future of the country’s gold. He had succeeded in liberalizing the market without incurring Pombal’s opposition and in seizing the necessary funds for many of his fellow cabinet members’ projects. Despite the outbreak of naval conflicts with France, Ratton’s position remain unabated, even though he vocally announced his displeasure against the War Ministry’s intentions to counter-raid French shores.

The Lisbon Mint & Financial Thought – Part II

Left: The ‘Lisbon Mint’
Right: Lisbon-model Mint in Rio ​

In 1778, the Portuguese economy was still kept clean by the Lisbon Mint, a Pombaline institution which enforced financial transparency, market info divulgation and coin trust asides from the actual coin construction. However, because the post-Ratton economy was significantly more elaborated, developed and involved in the international theater, the Mint was growing increasingly inefficient. The creation of new, young wealth points in the empire, particularly in the Douro Valley, Brazilian Coast and Goa, caused a decentralization of high-tier economic activities which made Lisbon-centered cleaning harder and harder. There were also adequacy concerns regarding the cleaning in itself; the mint had already demonstrated improper overseeing of the Douro Valley market in its early years, so the question of whether or not the Mint, regardless of the efficiency of its methods, should oversee all markets in the empire was put in table.

Centralized financial institutions, indeed, needed to have powerful finances and while Ratton was drafting plans to adopt a central-bank system, he was concerned an early institution before reinforcing the mint system would allow dangerous gap-years in the financial vigilance.

In December 1778, Ratton approved the institution of a Lisbon-style mint in Rio de Janeiro with a charter covering Brazilian states. He also redesigned the Lisbon Mint charter to include only Metropolitan, Africa, India and Asian states. This would last till 1800 when Goa would become the center of the 3rd Mint in the Empire.

The ‘Hamburg’ Depot & Luso-German Treaty of Commerce

“If they already have what you have, sell them something else. If they are already getting what you have from someone else, sell them anyway for less. If they neither have what you have nor get what you have from someone else, then rob them blind! Time is money and we have ships to fill!”
-Jacome Rattan advocating the penetration of the German Market in the Chamber of Commerce, in 1778​

The Portuguese Jewish diaspora had spread throughout Europe during the Renaissance as a result of religious and social persecution, especially during the reign of King Manuel I, who took the throne during the height of Portugal’s arrival in India. They formed communities in kingdoms and sultanates that permitted better tolerance to Jews, particularly England, France, Netherlands, Turkey and the Holy Roman Empire. The Portuguese community in the city of Hamburg was especially noticeable, being descendent of ‘Marranos’[1] who fled during the Iberian Union of Phillip II of Spain.

Portuguese Synagogue Neveh Shalom (erected 1771)​

In 1710, an imperial commission fixed the position of Hamburg’s Sephardic and Ashkenazi communities by certain regulations. Under Joseph I of Austria, Portuguese Jews and German Jews were treated under the law under the same terms. The Portuguese Jews, however, resented this; they were proud of their noble lineage and often used it to distinguish themselves from other communities. As a result, they segregated themselves further in Hamburg society, especially from other Jews, leading to a decline of their power in the city.

While their level amongst Hamburg Jews was corroding, the community still showed signs of life between the 1750s and 1760s; a known Hachamim called Jacob Basan sent a letter of prayers for fast-day in honor of 1755 Earthquake victims, showing the community still had ties with its origin motherland, but the continued neglect of Lisbon led to their continued cultural decline. A major sign of this was when the supervision of Shechita (slaughtering of certain animals for food), formerly under their power, went over to the Ashkenazi community in exchange for a small meat-tax.

Change occurred, however, after the 1770s, when Portuguese involvement in Hamburg suddenly increased due to a number of factors:

• Luso-Liberalism: The 1770s and 1780s were a period of market and religious liberalism in Portugal that lifted restrictions on Jewish communities in commerce;
• Joseph Aaron’s Pro-Semite Actions: The Portuguese Minister of Agriculture & Health was gaining notoriety for his increasingly daring moves towards protecting Judaism in Portugal;
• Diplomatic Missions: Measures done in the Portuguese War Ministry’s ambassador corps under the Count of Lippe had allowed for, during the 1760s, an expanded diplomacy program in European Theaters. Lusitanian relations with several north-German states had been improving since the end of the Fantastic War;
• Royal Germanophilia: King Joseph II, especially after his marriage with Charlotte of Hannover, was known for his acute affection towards German literature, mythology and topics, which had led to a court fad turned towards Germany, England and the West Baltics in court;
• Post-Luso-Mysore Trade Weight: As a result of economic diversification, manufactory expansion, market advances and the increased commerce in the Portuguese India Company after the annexation of several important ports in southwestern India, the eastern goods supply in Portuguese markets had increased significantly as well as the attractiveness of Lusitanian goods, which all in turn lead to a significant growth of exportations. Most of these new exports found sales in Central and Northern Europe;

Portuguese ships, as a result of good diplomacy, increasing Free Trade and boosted industry, were able to grow their numbers in Northern Europe almost uninterruptedly across two decades. This growth, however, was disorganized and unfocused, fed mostly by the capricious nature of a diversifying market and heavily reformed society, not to mention entirely dependent on the good will of German states to keep tariffs and costs low for Portuguese merchants (something that would be proven evident during the Continental blockade period of the Napoleonic Wars). There was also the counter-flow of goods to consider; despite the intense growth of glass, cork and naval supply industries in Portugal, German manufactory had a long history of development and competitive trade that still made them attractive to Portugal, lessening profits, and Franco-British presence was in a better position than Lisbon’s to sell their wares.

Minister Rattan wished to support the Chamber of Commerce in securing its trade in Germany, but his options were limited; nothing could beat the tyranny of distance or the barrier of language, so alternatives had to be found to assure Portuguese exports flowed into Germany. The river city of Hamburg possessed more than a Portuguese community wishing to preserve historical ties; it was a critical gateway of the Elbe River market, which traded with goods all the way to Prague and Berlin and the home of the Berenberg Bank, one of the oldest banks in the world, all factors which made it perfect as a trade foothold. The Bank of Hamburg, in fact, founded in 1619, had been formed in significant part thanks to the influx of Portuguese merchants during the early 17th century.

There was, however, several precautions to take in mind. Hamburg was a major city of the Hanseatic League, and, by far, the most Republican of them all. Aristocracy was abhorred there, the title system was detested, and Prussian nobles were looked down on by the Hamburg Oligarchy that ruled the city, which refused to accord in anything with them. Portugal could not treat the Free City like it did its traditional friends and had to be minded of Hanseatic traditions and policies.

A special diplomatic mission was sent to the Free City of Hamburg from Lisbon with the objective of furthering Luso-Hamburg ties. The objective was to establish a Treaty of Commerce that furthered Luso-German interests in a constructive manner. This was a difficult task, as oligarchic societies were built so as to dominate their internal commercial affairs and prevent foreign nose-meddling.

The Portuguese, however, had an ace in the hole; British industries.

The industrial and agricultural dominance of Britain during this period was rivaled by none, allowing it to sell massive amounts of manufactured goods to Europeans with no serious competition, especially as France’s economic situation became critical during the Revolutionary period. Portugal advocated to Hamburg’s mayor that it could provide alternatives to British goods with some of its eastern and manufactured cargos, allowing for the sale of the same goods at cheaper prices. This capitalized on a wide-spread inability to directly compete with British productivity; to provide a single alternative, even if microscopic, was enough to start a trade balancing trickling that would favor the smaller businessman.

However, Portuguese goods themselves were unlikely to compete with British goods in attractiveness and quality. While Portuguese industry had been built on more prepared groundwork, allowing a superior short-term growth rate, it ultimately lacked the size and age to fight British commerce head-on. Portuguese merchants therefore had to bank on three things; cheaper prices, ties with the Luso-Hamburg community and uniqueness of goods. This meant selling at cheaper prices goods that the British dominated and selling goods at higher prices when both the Germans and the British lacked it, all in the meantime banking on local friendliness from Portuguese descendants to slide products in regardless of quality or quantity through middleman trade. This would allow the reattachment of ties with the Lusitanian community and improve market penetration.

The reason this was attractive to Hamburg was mainly as a way to lessen British prices and the non-threatening market power Portugal possessed. In 1779, under permission of the Holy Roman Emperor in Austria, the Luso-Hamburg ‘Treaty of Friendship and Commerce’ was therefore something that highly favored Portugal and Hamburg in very different ways, as most strong alliances do. Portugal profited from selling its extra goods and Hamburg profited from lower purchase prices; the only truly vexed party was Britain, something that made everyone happy. Its main lines stipulated the following:

• Altona Law Charter: The westernmost part of Hamburg, known as the city of Altona, where most of the Portuguese residents had resided since heavy taxation forced them to flee from Hamburg itself, underwent law reform that allowed the Sephardic community to live there under less religious oppression or monetary burden. This would allow a more complete concentration of the community into that area in the right bank of the Elbe river through willing migration, further segregating the Portuguese community into a ‘ghetto’, but solidifying it as a mercantile community dedicated to acting as a middle force between Portuguese merchants and the German market;
• Exclusive Trade Rights: Port and market privileges were extended to Portuguese merchants and ships on Hamburg exclusively. Most Portuguese commerce in Germany now passed through Hamburg as a result of the extended legal rights and reduced costs, allowing the city of Hamburg to profit from Portuguese goods reselling;
• ‘Hamburg Depot’ Founding: A provisional Commerce Chamber to regulate Luso-Hanseatic commerce, legal affairs and relations was set up in the city, nicknamed the ‘Hamburg Depot’. Through this building most of Portuguese commerce, diplomacy and arrangements in Northwestern Germany were from then on organized and conducted;

The increased Luso - German commerce in Hamburg​

The treaty and ‘Hamburg Depot’ allowed for the flourishing of Luso-German commerce and friendship. It also allowed for the city to grow as the center of the Sephardic community in Germany, as the reduced taxation laws attracted disparate Sephardic families to Altona. The formation of the Portuguese Ghetto carried many positive and negative implications, as on one hand it eased tensions between the Sephardic and their Ashkenazim counterparts, as well as with the Germans, but on the other hand made the community as a whole more visible and territorial thanks to its newfound concentration in Altona. This would affect things like street architecture, internal city dynamics and law itself over time to reflect the solidified identity of Jewish Luso-Germans at the same time it fomented German indifference to PRP actions, as the city became more likely to agree with the Portuguese migration office’s proposals when it all happened to a segregated alien community in a well-defined area.

The increased commerce and diplomacy therefore came at the cost of a sudden makeup change in Hamburg; the Portuguese in the city were no longer abandoned by their lost motherland to their fate, even reattaching ties with mercantile compatriots and family members, but they lost integrity with their German hosts, leading to a sense that they were no longer immigrants but expatriates despite generations and generations of living in Germany.

By 1782, 78% of the Portuguese in German territories lived in Altona, most tied to mercantile, religious, communal or diplomatic careers. This increased Portuguese influence in Hamburg in a peaceful, mutually beneficial manner. Disputes were solved in legal trials following Hamburg law to avoid diplomatic conflict, taxes and tariffs were paid to Hamburg coffers and trade followed Hamburg regulations. Portuguese profits had to, therefore, derive from their sales and from the stocks bought back in Lisbon in companies based in Hamburg. Even so, it was quite the boon, as the experienced and settled Luso-Sephardic community in Hamburg was, under the eased taxes, able to set up companies and businesses that took in Portuguese goods and enriched Lisboan coffers.

From 1778 onward, Hamburg acted as a springboard of Portuguese politics and commerce into Northern Germany, limited as it may be. The Luso-Prussian agreements that followed, for example, sparked mostly out of the increased Portuguese activity through Hamburg. This position, however, would suffer a downfall during the Napoleonic Wars, when Franco-Luso relations were at its very worst and Germany was occupied by the Grand Armée, causing Portuguese influence center to migrate eastwards, towards Prussia.

[1] Marranos is a term used for those Jews living in Iberia who publicly converted or were forced to convert to Christianity yet continued to practice Judaism in secret.


Note:
We continue posting the Last Years of Pombal 1777 -1782. This port takes us to the heart of the ability the Portuguese had in the growth. Finances, for it was all these changes that provided the Portuguese with the ability to expand both territorially as well as economically. just like IOTL the reforms started during Pombal grew as the years went by. During the 1st half of Maria's reign Portugal was flush with money not in same way it had during her great grandfather years (through Brazilian gold) but through commerce. They just accepted it though not did anything to continue the same types of reforms. Here we do have the same people pushing the reforms through and industry and commerce are gaining in stature and size. Questions/Comments

Please return Sunday March 17 as we post the 45h installment of the Rebirth of Empire (2 of 2) - The Last Years of Pombal 1777 - 1782 (Minister of Finance and Commerce).

 

[crazyself00]

Intriguing and unusual direction.

 

[Sceonn]

causing Portuguese influence center to migrate eastwards, towards Prussia

Isn't that interesting.

Looks like Portugal is positioning itself to truly rival Britain throughout the truck 19th century. And we know that population wise the Portuguese territories are destined to outpopulate British ones.

 

[Johannes Parisiensis]

With the additional links to Germany, it might be interesting to know the volume of investments between the two areas and will German migrants go to Overseas Portugal.

How a Portugal nearer from Britain will affect Spain?

 

[Lusitania]

Intriguing and unusual direction.

I think we take that as a compliment. Thanks.

Isn't that interesting.

Looks like Portugal is positioning itself to truly rival Britain throughout the truck 19th century. And we know that population wise the Portuguese territories are destined to outpopulate British ones.

Hm..... Rival or supersede Britain be very hard if not ASB. The British have such a huge lead on everyone be it empire size, economy and population. The lusophone empire can establish itself as a strong world wide empire capable of holding its own and not dependent on the British like iOTL but one that will be smaller just not inferior. That is the best equal not inferior.

With the additional links to Germany, it might be interesting to know the volume of investments between the two areas and will German migrants go to Overseas Portugal.

We will have a few later posts about the Prussia-Portugal and other countries specifically Sweden and Russia. For now we just want to state in the early 1780s we have a much larger presence in both North Sea as well as Baltics. We have something to sell and are our own masters which helps.

How a Portugal nearer from Britain will affect Spain?

Not well, but I do not want to speak ahead of ourselves. It is important to state that it was not the closeness of the Portuguese to British that upset the Spanish most but the reforms and changes happening in Portugal that was most unsettling to them.

 

[Wolttaire]

portugal is postioing itself to be a rival to any power except britian

 

[crazyself00]

I think we take that as a compliment. Thanks.

It was meant as a compliment, if I wasn't evident.

 

[Lusitania]

Rebirth of Empire (Part 2 of 2) (Cont.)

The Last Years of Pombal (1777-1782) (Cont.)

Ministry of Finance & Commerce (2 of 2)
Trade Contract Growth & Development

“Lessen costs at all costs.”
-Lisbon Chamber of Commerce Inscription​

Finally, as productivity increased, Minister Ratton worked to secure profitable commerce contracts in Europe and North America. The main theaters of sales were in Central Europe, where the city of Hamburg distributed goods purchased from the Portuguese, in the Mediterranean, where South American goods found a market, and in North America, where the young United States were recovering from war. This allowed the continued investment in productivity to return even higher yields but also incentivized further progress in commerce, diplomacy and government, slowly matching the success the British had in replacing taxation and slavery with commerce and manufacturing.

This followed a new tendency in Portuguese colonial economy in which diversified productivity in colonies, especially Brazil and Goa at first but later on Angola, that replaced the previous reality in which each territory specialized in the product its climate was most ideal for (African colonies almost exclusively provided slaves, ivory, hardwood and gold, for example). As shipments from India began arriving with cargos of iron ingots instead of spice crates, trade purchase began to be used to alleviate domestic costs, as Goa could produce iron more easily and cheaply than Metropolitan Portugal. Gunpowder also began to be primarily purchased from Brazil instead of domestically produced in Portugal. Allied to a competitive Free Trade, this allowed Portugal to purchase goods at unprecedentedly low prices, enriching the Chambers of Commerce and state.

As for the new industries rising in Portugal, especially glass, textiles, paper and cork, they had to find commerce in places where European competition wasn’t strong. With domestic trade being hurt by the more attractive and prestigious British goods, the Chamber of Commerce directed the sales of the new national brand goods to European colonies, the United States and further away. This option increased costs as sea travel was arduous compared to selling products at home but benefited for weaker competition thanks to Portuguese prestige in Asia and a better position from which to ship goods to overseas. This was a period of growing pains for both the national brand industries and the Merchant Navy, as profits were secured but small.

Other contracts focused on securing the sustainability of the Portuguese Empire and in this case, Portugal found an unlikely ally; Russia. The Russian Far East possessed boundless resources critical to the maintenance of armies, navies and cities, particularly timber and coal, and the recent treaty of Friendship and Commerce struck with St. Petersburg allowed Goa to ship materials from the east, rather than the west, alleviating what was a long and dangerous supply route for top quality ship materials at minimal costs. The benefit for Russia was in allowing its colonists and distant Siberian settlements to sell their excessive wares and the benefit for Portugal was faster and cheaper Navy growth. This opened a new Far Eastern sea lane with promising political repercussions for the future, as the Portuguese and Russian Eastern Navies began enjoying a ‘shadow alliance’ against local powers, particularly China.

The main port of mediation for this was Macau, Portugal’s farthest port. While the Portuguese were only allowed to administer the territory, the fact it could authorize ship-stopping alone was enough to give it tremendous diplomatic and trade value. The governor of Macau authorized the Russian Imperial ships stationed in Siberia to resupply in the port. Russian ships were allowed to conduct trade in Canton since the Treaty of Kyakhta was signed in 1727, so the importance of Macau was redundant to Russian merchants and admirals, but the rise of Luso-Russian commerce increased the interest of Far Eastern Russian citizens in having a safe, secure and mediated routed with the Portuguese colonies and even Canton itself. In 1779, a Russian embassy was stationed in Macau for the first time to ensure respectful diplomacy with the governor of Macau.

Another theater of commercial flourishing was none other than the La Plata estuary. The annexation of Cisplatina into Brazil secured a joint Luso-Hispanic control over one of the most important waterways of the American Continent, so important that it could determine control over the inland Paraguay areas due to its relatively high navigability. This prevented the rise of prices in La Plata commerce and stimulated the free flow of merchants to the area. This, in turn, was vital for the newly arrived investors and settlers of Cisplatina, which desperately needed good economic conditions to ensure Brazilian settlement was successful and had international support.

The ensuing influx of African - Brazilians, settlers and merchants allowed Montevideo and Colonia to stabilize and grow quicker than expected, turning into such an important trade spot that one of the major Brazilian Letter Road offices was placed there to ensure reliable communication. Rio de Janeiro still dominated the influx of immigrants and commerce into Brazilian territory, but Cisplatina became a disproportionate second, in the sense it quickly surpassed many other important ports despite the limited size of its administrative area, deepening political rivalry with Bahia. British merchants in particular enjoyed special privileges, with Calcutta office sending its goods straight into Cisplatina shores.

At the turn of the decade, however, Portugal would find itself at war with none other than the Netherlands, its main historical trade rival, over commercial-colonial conflicts. The hostility sparked between Amsterdam and Lisbon ultimately stemmed from a quadruple economic rivalry regarding colonial productivity in English, French, Dutch and Portuguese colonies in India and the Spice Islands, and it threatened to jeopardize Portuguese commerce in Northern Europe due to the strategically dominant position the Dutch enjoyed in the region’s commerce. The ensuing naval battles would pit the reformed Portuguese Navy against the Dutch Navy, the latter being past its historic peak but in a process of new expansion as well, in theaters from Europe to the Far East.

Thus began a short-lived period of market instability for Portuguese investors in Northern Europe, who mostly believed the war was tipped in Dutch favor. A repetition of the 17th century losses to the Dutch was feared and many trade links would be severed were it not for British friendship, which assured Lisbon that it would protect its merchants in favor of Portuguese participation in the conflict.

The result of that war would be the end of the Dutch colonial dominance in many territories, particularly Africa, where the fate of its colonies was almost entirely placed in the hands of the Anglo-Luso Alliance, and a strengthening of Northern European reliance on Portugal as the Dutch lost the ability to act as the region’s main colonial good supplier, allowing Portuguese stocks to rise and a boom of growth to follow.

Between 1777 and 1782, economic development had its highest non-gold-related growth as the market liberated itself and flourished countless new sale and purchase deals that resulted in surplus increases of over 10% in some years, allowing further industrialization, navy growth and market seizes. This attracted a lot of attention, particularly from Spain and the Netherlands, eventually forming a catalyst for a whole new Luso - Dutch War.

GDP per Capita per Metropolitan Region (1700-1780)
The 1760-1780 Portuguese spike remains slightly above to what would have been the pre-Earthquake trend, demonstrating that the Pombaline period successfully recovered from the losses of the disaster and surpassed pre-1750 expectations by 1770.​

National Accounting, Financing Discipline and the ‘Sonácos’

“We were rich for having a bag of money. We are richer for putting it in a safe. We will be richer for buying wine with it which value will increase over time. We will be wealthy, however, if we write it all down.”
-Joseph Aaron

​

The economic swelling in the metropolitan territory was followed by three separate financial developments; the crackdown on patrimonial irregularities (mostly in the Early Pombal Period for the purpose of increasing tax efficiency and land charting), the creation of a reformed mint to promote transparency and positive inflation (more concretely the Mints of Lisbon and Rio) and finally the promotion of merchant bookkeeping. These three developments could be summarized in one significant reform in accounting, the practice of registering patrimonial possessions and changes, both positive and negative, both physical and in credit form.

As of 1777, the Mints were growing increasingly inefficient as the economic patrimony grew past the boundaries of possible control, meaning that corruption, smuggling and criminality was predicted to be on the rise. A possible solution would be the creation of a central bank, but this would not be done until 1783, after the Treaty of Paris was signed. It was the Finance Ministry’s job, however, to continuously work towards improving financial efficiency, so work was to be done to increase it despite the impossibility of a centralized bank as of then.

Management practices were one of the well-developed branches in late Pombaline Portugal, if the publication of the ‘General Theory of Productivity’ was proof of anything. The separation of the wealth of work from the wealth of agriculture theorized by Joseph Aaron meant that ‘wealth’ which contributed to the overall well-being of society could include the work of ‘management’, ‘bookkeeping’ and ‘accounting’ because these contributed to the increased efficiency of transactions and credit store. This was all a tremendous contrast to 1750s Portugal, which the active Finance Minister himself described in his journals to his home country France as ‘not even having the practice of bookkeeping’.

This meant that the science of finances was open to research and that a community of merchants, students and bureaucrats were available to profit from it, study it and practice it respectively.

The biggest development to general accounting in the 18th century was ‘cost accounting’, also known as ‘Analytical Accounting’, something that sprouted from the Industrial Revolution and consisted in tracking down and rerouting indirect costs by implementing ‘Countable Accounting’ (budget and basic accounting) and ‘Strategic Accounting’ (periodic accounting and trend reports accompanied by strategic proposals based on them). This spread throughout Europe along with industry, Portugal included, but its capacity to be embraced and improve national situations varied economy to economy.

Italy had long been the center of accounting in Europe since the Italian School of Accounting was founded in the 15th century. While knowledge of the field was growing since the 13th century in the region, it was Luca Pacioli, in 1494, who published the accounting treatise that originated said school, ending the Era of Systematization started by Fibonacci in 1202 and beginning the Era of Literature.

In Portugal’s case, the situation was one of difficult implementation but superior potential as a result of its period of commercial uprising. The number of businesses and contracts was multiplying, which meant reforming accounting was a challenge but could yield tremendous improvements. The demand for evolution in the accounting system began increasing due to tensions between financial institutions and companies, between the government and the private sector, between the government and its own organs and a general skepticism towards patrons, bosses and investors amongst the population. While great strides had been made by Mints to improve financial transparency, these were publications that could be manipulated to clandestine gains without a higher understanding of patrimonial knowledge.

This is not to say that efforts had not been made in Portugal to advance its accounting even prior to the Pombaline Cabinet years. In 1758, John Baptist Bonavie demonstrated the capacity to study proper accounting in Portugal by publishing an innovative treatise known as the ‘Methodo Facil’.

‘Methodo Facil’
John Baptist Bonavie documented accounting instructions for the Portuguese as early as 1758​

This work, however, as good an example as it may be of accounting in Portugal, was ultimately a failure in terms of measuring up to its more modern counterparts all over Europe not due to any lack of quality, but rather publishing issues. As demonstrated by the signatures of King Joseph I and the Holy Office in page 14, financial works in 1758 were significantly curtailed in Portugal in what were the hot years of censorship immediately after the Earthquake; only religious and nationalistic text such as the ‘Lusíads’ enjoyed more liberty and thus this work was under-published.

In 1778, a group of new generation accountants in Oporto, preoccupied with the inefficiency of the Lisbon Mint in correctly calculating values in their region, especially in the vineyard storages, formed a national association to protect and advance their interests and labor outside of the Order system that the government was creating, which included the Nurse, Engineer and Economist Orders. The National Association of Accounting (por. Sociedade Nacional de Contabilidade or SoNaC) and its members, which became jokingly known as the ‘Sonácos’, wished to employ their practice privately in a centralized manner on a national scale, lending their services to new companies for payment. They gained fame between 1780 and 1782 for helping many fledging companies and small businesses survive taxation and stiff commercial laws, but also rooted out several patrimonial schemes such as undisclosed property by method of financial calculation rather than direct investigation.

Eventually some of their members were found to be corrupt as well, as the exposure to illegality and the ensuing bribery by land, business and wealth owners decreased the inefficiency of their practice, encouraging the Ministry of Finance to finally regulate the practice of accounting. From 1781 onward, Ambassador Castro promoted accounting classes to breed a public sector of accounting to rival private accounting companies like the ‘Sonácos’. The practice of accounting continued to go through growing pains, however, as the public and private dimensions struggled to find a beneficial balance.

In Brazil, however, interest in accounting increased exponentially, as problems regarding property and wealth were far more widespread. The regulation of land, wealth, mining and planting was a concern to all in power who wished to prevent business owners and colonists from overpowering their government bodies, creating further smuggling and corruption. State Governors rapidly began mimicking Lisboan efforts to implement accounting classes, beginning the exchange of accounting stamps in Letter Office mail. It was not long before its community’s potential would outclass the metropolitan one and summits began to be held in the Chambers of Commerce to discuss the ongoing issues amongst accountants and financiers.

6th Accounting Summit Convocation
Accounting information and summit convocations in Brazilian mail multiplied in the 1780s​

The development of accounting and financial bureaucracy was not wealth in itself, of course, and some even regarded it as needless, expensive bureaucracy. Effective accounting, however, provided a number of very important benefits:

• Credit Confidence: Both internally and abroad, confidence in Lusitanian coin grew as a result of updated bureaucracy existing, increasing national monetary prestige and attracting commerce and investment;
• Financial Discipline & Stability: The Portuguese coffers, purses and finances were now strictly exercised and managed, reducing both private and public waste significantly and creating resistance to future economic crises;
• Further Inflation Monitoring: The registry of patrimonial goods allowed for further monitoring of the value of all goods in the country, including their rise and drop over the years, as well as government surpluses and deficits, at least as far as contemporary methods allowed;

All three of these benefits would only increase the more accounting was developed. This sector, however, had obvious monetary demands as it was a field of labor in itself dedicated to preventing the loss of cash in other fields of labor, a purpose that seemed taxing to many, to say the least.

Note:
We continue posting the Last Years of Pombal 1777 -1782. The continuation of the commerce and finance port takes us to the heart of the ability the Portuguese had in the growth. Finances, for it was all these changes that provided the Portuguese with the ability to expand both territorially as well as economically. just like IOTL the reforms started during Pombal grew as the years went by. During the 1st half of Maria's reign Portugal was flush with money not in same way it had during her great grandfather years (through Brazilian gold) but through commerce. They just accepted it though not did anything to continue the same types of reforms. Here we do have the same people pushing the reforms through and industry and commerce are gaining in stature and size. Questions/Comments

Please return Sunday March 24 as we post the next installment of the Rebirth of Empire (2 of 2) - The Last Years of Pombal 1777 - 1782 (Minister of Planning and Infrastructure).

 

[Sceonn]

Portugal is creating an early alliance network with Russia and Prussia-Germany it seems on top of their traditional British alliance.

I can't wait to read how the Russian Far East developes TTL.

 

[Wolttaire]

i sense a imperial federation forming

 

[Johannes Parisiensis]

The main port of mediation for this was Macau, Portugal’s farthest port. While the Portuguese were only allowed to administer the territory, the fact it could authorize ship-stopping alone was enough to give it tremendous diplomatic and trade value. The governor of Macau authorized the Russian Imperial ships stationed in Siberia to resupply in the port. Russian ships were allowed to conduct trade in Canton since the Treaty of Kyakhta was signed in 1727, so the importance of Macau was redundant to Russian merchants and admirals, but the rise of Luso-Russian commerce increased the interest of Far Eastern Russian citizens in having a safe, secure and mediated routed with the Portuguese colonies and even Canton itself. In 1779, a Russian embassy was stationed in Macau for the first time to ensure respectful diplomacy with the governor of Macau.

It means a quicker conquest of Siberia by Russia, and a potential of more China-Russia conflict.

The ensuing influx of African - Brazilians, settlers and merchants allowed Montevideo and Colonia to stabilize and grow quicker than expected, turning into such an important trade spot that one of the major Brazilian Letter Road offices was placed there to ensure reliable communication. Rio de Janeiro still dominated the influx of immigrants and commerce into Brazilian territory, but Cisplatina became a disproportionate second, in the sense it quickly surpassed many other important ports despite the limited size of its administrative area, deepening political rivalry with Bahia. British merchants in particular enjoyed special privileges, with Calcutta office sending its goods straight into Cisplatina shores.

Cisplatina looks like the kind of place Germans migrants from allied states could go, along with eventually Russian ones.

 

[crazyself00]

Didn't Portugal have problems collaborating with Spain in the La Plata estuary?

 

[NK_Tesla]

A stronger Russian Far East probably terrifies Japan and China. I'm curious about this upcoming conflict with the Dutch, does Portugal take more colonial territory from them and expand their empire?

 

[Wolttaire]

also I sense a ecominic revolution in porutgal and dare I say an industrial revolution
perhaps with increase growth in Siberia will translate over to Alaska unlikely but possible
with a large presence in China and more increase trade there I except Portugal will be more inclined to gain new territoes in the far east/ defintily an expasion of macu making it larger is guaranteed

 

[Lusitania]

portugal is postioing itself to be a rival to any power except britian

Yes it will be a world power, (by that I mean equivalent to what we considered a world power in the late 19th and early 20th century. Similar to other european powers with colonies world wide. How large and powerful we not able to be determined at this time since we not sure who and how large each country will be). Portuguese will be able to defend its own interests and not be considered a dependency of Britain as Portugal was in the 19th century.

It was meant as a compliment, if I wasn't evident.

Thank you

Portugal is creating an early alliance network with Russia and Prussia-Germany it seems on top of their traditional British alliance.

I can't wait to read how the Russian Far East developes TTL.

The fact that Portugal has goods that both countries want and also has $$ to buy their goods allows the Portuguese to become a player.

As for future it will be different but we need to realize that in both cases the Portuguese need to pass beside the British. So while Portuguese be a competitor it would not be smart to be antagonist. Something it learn the hard way with the Dutch.

i sense a imperial federation forming

Hm.... could be. What can’t be is the same situation that existed in iotl. We all know what happened.

 

[Drunkrobot]

With the increasing communications between White Portuguese looking to combat their vulnerability to tropical diseases, Africans with a history of clearing mosquito nests, and Indians which have used mosquito nets since the Middle Ages, eventually someone important in the Portuguese command chain is going to recognise that it's very important to cut down on the number of times a person in a place like the Amazon or the Congo gets bitten by mosquitos. With cloth production rising in Angola, supplying nets to the Atlantic Army and to explorers could be a very lucrative contract.

I'm posting my prediction on what the final extent of 'Portuguese Africa' might be, given Portugal continues playing its cards right and only taking land up to rivers for maximum defensibility.

Spoiler

And a bit of writing advice I've thought to give while reading this wonderful timeline: I've noticed you using the word 'suffer' in both negative and positive contexts, "Their army suffered a great defeat" and "The colony suffered substantial investment". It's only in a negative context where 'suffer' is appropriate, when someone or somewhere has something happen to it that is good for them then I'd recommend probably using a word like 'enjoy' instead, "The colony enjoyed substantial investment".

 

[Wolttaire]

I would just add more of nambia to it after that perfection!