In addition to dealing with labor supply, Mem de Sá, who was the consolidator of Portuguese Brazil, dealt successfully with the French threat. The French had continued to attack Portuguese shipping and to maintain interest in a permanent colony. Noting that Rio de Janeiro's Guanabara Bay had not been occupied, Vice Admiral Nicolas Durand de Villegaignon, a French navigator, led a mix of Huguenots and Catholics there in 1555 to establish a colony, France Antarctique, on Ilha de Sergipe. After a decade, his utopian dream of finding a religious refuge for Protestants and Catholics failed. Despite their good relations with the Indians, the French could not withstand the Portuguese assaults that began in 1565. That year, to ensure future control of the bay, Mem de Sá founded the city of Rio de Janeiro, which became the second royal captaincy. Expelled from Guanabara Bay in 1567, the French turned their efforts to the northern coast. They made alliances with the Indians and settled themselves on Ilha São Luís do Maranhão in 1612, where fierce fighting led to their expulsion in 1615. They kept active north of the Amazon delta, maintaining claims to Amapá.

By 1580 the Portuguese had overcome French threats and most indigenous resistance to their command of key ports. At this point, a more profound Spanish threat appeared with the passing of the crown of Portugal to King Philip II of Spain. This event had immediate and long-range consequences. Now Europe's two greatest empires were united under a single ruler and could well have been joined permanently, save for the determination of the Portuguese to maintain their identity. The Iberian union gave the Portuguese easier access to the Spanish domains. For Brazil, however, the most important result was that it made enemies of Portugal's former business associates, the Dutch. Portugal's commerce was more open than Spain's and perhaps more practical. Portugal recognized its need for shipping and for access to markets, both of which the Dutch provided for Brazilian sugar. The spirit of cooperation faded with the union of the crowns as the Dutch, long struggling for independence from the Spanish Habsburgs, were shut out officially from the Portuguese domains. This exclusion led to the formation of the Dutch West India Company in 1621 and the seizure of Brazilian sugar lands. After being unsuccessful in holding Salvador in 1624-25, the Dutch captured Pernambuco in 1630 and eventually extended their sway from the Rio São Francisco to São Luís do Maranhão until finally being forced out in 1654.

The Dutch incursion was the longest and most serious challenge to Portuguese control by a major maritime power. The struggle to drive out the Dutch had devastating effects on the sugar plantations and sugar mills. The Dutch, particularly Governor Johan Maurits, Count of Nassau, had worked to build good relations with the Portuguese planters in the interior, supplying them with credit, slaves, merchandise, and European markets. Nassau encouraged religious tolerance, constructed buildings and canals in the style of Amsterdam, and brought in artists, engineers, and scientists to embellish, record, and study the local flora, fauna, and peoples.

Portugal and its Brazilian subjects had divergent interests in responding to the Dutch. When the Duke of Bragança took the throne as João IV in 1640, his government faced the determination of Philip IV to reconquer Portugal, and he therefore needed to maintain peace with the rest of Europe. As much as the Portuguese economy needed the revenues from the sugar trade, the court had to face the reality that in Europe the Dutch dominated a good portion of that trade. Thus, if Por-tugal attacked Dutch-held Pernambuco, it would earn an enemy in Europe and lose access to the market. At the same time, the king understood the importance of Brazil when he called it his milk cow (vaca de leite ). Indeed, historian Charles Boxer asserted that Portugal's independence depended chiefly on the Brazil trade, which centered on sugar and slavery.

The Dutch did not show the same hesitation. In 1641 they seized Luanda, an important source of African slaves, in violation of a truce with Portugal. Holland now held sugar and slave ports in the South Atlantic and the distribution system in Europe. Although Lisbon could not merely abandon its subjects in Brazil, it realized that it would be foolhardy to fight for the sugar area without also regaining the source of African slaves.

The colonists in the Dutch-occupied area played their own game of deception. They borrowed Dutch money to restore their war-torn plantations and engenhos and to buy slaves, but they realized that their long-term interests lay in expelling the Dutch and with them their indebtedness. After 1645, together with the governor general in Bahia, they conspired, rebelled, and fought against the Dutch. Their victories of 1648 and 1649 at the Battle of Guararapes in the Recife area of Pernambuco are commemorated today. However, after nine years of war the scorched-earth tactics had ravaged the region. Although sugar prices rose in Europe, Brazilian planters could not respond and permanently lost their leading market position. The Dutch and English set up plantations in Suriname and Barbados, taking advantage of the techniques developed in Brazil and their better access to capital, merchant fleets, and the northern European market. Although there were years of recovery (1665-80, 1698-1710), sugar was no longer the foundation of the Brazilian economy. Northeastern Brazil entered into a long stagnation, and Portugal, which now depended heavily on Brazil after its losses to the Dutch in the East Indies, watched its economy deteriorate.

Gold Mining Displaces Cane Farming

The decline in the sugar economy cut off the smaller Northeastern cane farmers from the customary paths to higher socioeconomic status, producing a situation in which this potentially powerful segment of the population no longer had reasons to support the traditional colonial society. The cane farmers had the same social origins as the wealthier planter and mill-owner class but generally were less independent financially, and now their future was darkened. As sugar prices fell, the planters and mill owners' response was vertical integration (see Glossary); stages of production were consolidated under the control of fewer firms. Purchases from independent cane farmers were reduced and their lands acquired. The situation was potentially explosive. Historian Stuart Schwartz commented that "at no time in Brazilian history had the conditions for a profound social upheaval been more suitable." But it did not occur for two reasons: the cane farmers did not rebel against the sugar barons for fear of encouraging a slave rebellion, and in addition, newly discovered gold fields to the south soon beckoned to free and slave populations. The removal of pressures for change solidified the hold of the great landowners on the coastal plantations.

Small deposits of alluvial gold had been exploited quietly for decades in São Paulo and to the south. The Paulistas likely found more than they revealed, fearing that the greed of the Portuguese authorities would soon strip them of their semi-independence. The discovery of gold by Paulistas in various parts of what is now Minas Gerais (General Mines), between the Serra de Mantiqueira and the headwaters of the Rio São Francisco, probably occurred between 1693 and 1695, but word filtered out slowly. The greatest concentration of deposits was along Brazil's oldest geological formation, the Serra do Espinhaço, lying in a north-south direction, throughout which it seemed that every river, stream, and brook glittered with gold. Mining camps that turned into the cities of Ouro Prêto, Mariana, and Sabará soon located in its southern end, and by 1730 diamonds were coming out of the northern reaches around Diamantina.

Word of the discoveries set off an unprecedented rush, the likes of which would not be seen again until the California gold rush of 1849. The Paulistas soon found themselves competing for control with adventurers from the Northeast who streamed down the Vale São Francisco, from Portugal, and from elsewhere. By 1709-10 the Vale São Francisco had become a lawless region filled with the dregs of the Portuguese world. Considerable violence broke out between the original Paulista bandeirantes , who considered the mines theirs, and the outsiders (emboabas ). This fighting gave the crown authorities a reason for asserting royal control and arranging a settlement of the War of the Outsiders (Guerra dos Emboabas, 1708-09). Many Paulistas moved on to new gold discoveries in Goiás and Mato Grosso.

The discoveries shifted Brazil's center of gravity away from the Northeastern coast and toward the South and West. The loser would be Bahia, which in 1763 lost the viceregal capital to Rio de Janeiro, as power followed wealth. The population also shifted, as would-be miners and those who would profit from the mines arrived with their native or African slaves. The Jesuit Father André João Antonil (whose Italian name was Giovanni Antonio Andreoni) wrote the best contemporary study of Brazilian economic and social conditions. He said that by 1709 some 30,000 people were in Minas Gerais. In the next decades, the population swelled. The 1735 tax records showed a total of 100,141 slaves, among whom there were numerous natives. By 1782 Minas Gerais's population of 319,769 included 166,995 blacks, 82,110 mulattoes, and 70,664 whites. The state had the largest concentration of population in the viceroyalty of Brazil: 20.5 percent of Brazil's 1,555,200 people.

The early population consisted predominantly of unruly males, who knew no law but their own whims and who drove their slaves hard in an existence that historian Charles Boxer tagged as "nasty, brutish, and short." Many African slaves reacted by running away to form hiding places called quilombos and were pursued by roughneck "bushwhacking captains" (capitães do mato ). However, during the first decades life could not have been easy for anyone. Items such as meat, corn, flour, and rum were rare and costly. The first local supply of hogs and chickens appeared only in 1723, and a flask of salt could cost as much as half a pound of gold.

By the last decades of the eighteenth century, however, the cities of Minas Gerais were graced with impressive baroque and rococo churches, multistoried homes and shops, and grand public buildings. Poets and musicians enlivened the cultural scene. Some 3,000 musicians, mostly mulattoes, played fine baroque pieces, often in churches built by architect Antonio Francisco Lisboa (also known as "O Aleijadinho") and under ceilings painted by Manuel da Costa Ataíde.

The overland trails from São Paulo and from Paratí were superseded by ones connecting to Rio de Janeiro. The new viceregal capital sent African slaves and European merchandise to Minas Gerais and received the heavily laden chests of gold and diamonds en route to Lisbon. Rio de Janeiro also served as the supply base for the newly created captaincies of Santa Catarina and Rio Grande de São Pedro, passing their livestock products on to Portugal. Those captaincies were linked overland to São Paulo and Minas Gerais via the livestock trails that ran northeast from the pampas of what was later called Rio Grande do Sul to Sorocaba in São Paulo Province.

Ranching had developed in the Northeastern interior as an adjunct to the sugar economy and in the South as the legacy of the Jesuit missions. In the eighteenth century, ranching was an increasingly important part of the overall colonial economy. The moving frontiers that it created drew the interior into effective relationships with European-oriented Brazil. From the interior of Maranhão, southeast through Piauí, Ceará, Pernambuco, and Bahia, then west into Goiás, and on down to Rio Grande do Sul, a set of cowboy (vaqueiro ) subcultures evolved that still mark local traditions. It was an age of leather in which the horse was the center of life. Many, perhaps most, of the vaqueiros were native Indians, mestizos, African slaves, and mulattoes. In the northern and central areas, slaves and free men worked together unsupervised for months at a time. In the South, the gaucho culture, mixing native, Spanish, and Portuguese bloodlines and traditions, took hold throughout the pampas of the Río de la Plata up into Rio Grande do Sul. In the latter state, by the mid-1820s cattle had driven out wheat farming, and the mounted gaucho with his bolas, knife, maté tea, and open-fire barbecued beef became characteristic.

Although gold mining weakened the dominance of sugar and seemingly stimulated the cattle industry, it did not totally supersede export agriculture. It displaced sugar as the colony's leading economic activity, but during the eighteenth century the value of gold exports never surpassed the value of sugar-led agricultural exports. Even so, gold did have serious long-term effects on Portugal. The fall in the value of Portugal's colonial products in the seventeenth century had made it difficult to obtain sufficient currency to purchase merchandise from northern Europe. In response, Portugal had begun to develop industries to meet its local and colonial requirements. The discovery of gold provided needed currency.

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. The elimination of the Jesuit missions, Spain's creation of the Viceroyalty of the Río de la Plata (1776), and the opening of direct trade between Spain and Buenos Aires further reduced the profitable trade in smuggled goods (see fig. 2). The decline in smuggling reduced transshipments of British goods through Portugal, reducing that country's overall level of trade with Britain catastrophically. The ensuing recession made it difficult to pay for the military expeditions sent to the southern borders during the 1770s, and the crown was unable to adjust expenditures in the face of declining revenues.

In Minas Gerais, landowners had manufacturing establishments on their properties turning out cotton, linen, and woolen items, and most of the other captaincies had "workshops and manufactories" that lessened the need to import from Portugal. The basis for a more complex textile industry was being laid.

Then, in February 1777, José I (king of Portugal, 1750-77) died, and with him went Pombal's hold on power and his common sense approach of encouraging industrial development. Pombal's successor as secretary of state for overseas dominions, Martinho de Melo e Castro, was alarmed that the nascent Brazilian factories could make the colony independent and warned that "Portugal without Brazil is an insignificant power." In January 1785, he ordered that they all be "closed and abolished."

In the early 1780s, Brazilian students at Coimbra had pledged themselves to seek independence. They were influenced greatly by the success of the North American British colonies in forming the United States of America. In 1786 and 1787, José Joaquim Maia e Barbalho of Rio de Janeiro, a Coimbra graduate studying medicine at Montpelier and a critic of the colonial relationship, approached Ambassador Thomas Jefferson in France. He told Jefferson that the students intended to break with Portugal and requested the aid of the United States. One of the Coimbra graduates was José Bonifácio de Andrada e Silva, the patriarch of Brazilian independence.

The failed Minas Conspiracy (Inconfidência Mineira) of 1789 involved some of the leading figures of the captaincy: tax collectors, priests, military officers, judges, government officials, and mine owners and landowners. Some had been born in Portugal, several had their early education with the Jesuits and later studied at Coimbra, a number wrote poetry that is still read and studied. But what they had most in common were financial problems caused by crown policies that required them to pay their debts, or that cut them out of lucrative gold and diamond contraband trade. They argued that Brazil had all it needed to survive and prosper and that Portugal was a parasite. They pledged to lift restrictions on mining; exploit iron ore; set up factories; create a university, a citizens' militia, and a Parliament; pardon debts to the royal treasury; free slaves born in Brazil; and form a union with São Paulo and Rio de Janeiro similar to that of the United States.

The history of the Minas Conspiracy is full of heavy drama. Revelation of the conspiracy turned brothers, friends, clients, and patrons against each other in an unseemly scramble to escape punishment. In one sense, the affair foreshadowed the nature of future Brazilian revolutionary movements in that it was a conspiracy of oligarchs seeking their own advantage, while claiming to act for the people. In the end, Lisbon decided to make an example of only one person, a low-ranked second lieutenant (alferes ) of the Royal Mineiro Dragoons named Joaquim José da Silva Xavier ("Tiradentes"). His execution in 1792 in Rio de Janeiro might well have been forgotten if the nineteenth-century republicans had not embraced him as a symbolic counterpoise to Dom Pedro I, who declared Brazilian independence from Portugal in 1822. Later, with the establishment of the republic in 1889, every town and city in Brazil built a Tiradentes square, and the day of his execution, April 21, became a well-commemorated national holiday. Nonetheless, because the Minas Conspiracy was marked more by skulduggery than nobility and clarity, its value as a national symbol required selective interpretation and presentation.

Portugal resolved to watch Brazilians more carefully and reacted forcefully to a nonexistent but suspected plot in Rio de Janeiro in 1794, and to a real, mulatto-led one in Bahia in 1798. Meanwhile, the French Revolution, the resulting slave rebellion in Haiti, and the fear of similar revolts in Brazil convinced the Brazilian elites that the dream of a United States-style conservative revolution that would leave the slave-based socioeconomic structure intact and in their hands was impossible. The crown separated the residents of Minas Gerais from the revived coastal sugar producers through policies that set their interests at odds. Lisbon diverted Brazilian nationalism with greater imperial involvement.

Data as of April 1997