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The Search for Gold

The landscape of Minas Gerais includes great hills and plateaus as well as rivers and creeks, where the explorers of Brazil believed there lay an abundant supply of gold. The bandeirantes (the Brazilian equivalent of the American cowboy), rough-and-ready settlers and residents of São Paulo, were among the few people who explored and inhabited the interior. It has been recorded that the Paulistas were searching for gold as early as 1572 in Paranagua. The period between 1693?1695 was defined by the discovery of gold and the ensuing rush from the coastal areas inland to strike it rich. After a few years the mining areas were oversaturated with people and gold was less plentiful, so new mining techniques were required. People with substantial financial resources, who could afford to develop and implement digging methods that employed troughs and hydraulic machines, thrived. Somewhat less effective, but attainable to poorer miners, was the practice of washing down the banks of creeks with sluices from higher ground.

The Portuguese crown, seeking to profit from the gold boom, sold plots of land in the mining areas at a size of 15 feet of land per working slave. Yet most land claims failed to yield a profit.

• Which groups of people typically ventured to the gold mines?
• Who actually did the mining? Who made the most profit from this period of gold production?

The Migration and Living Conditions

As soon as word got back to the coast that vast gold deposits had been discovered in Minas Gerais, a wave of people of all types descended upon inland Brazil. These settlers?white, black, mix-raced, men, women, old, young, rich, poor, members of religious groups and nobles?came from all parts of Brazil. They generally appeared, to their own government, as “vagabond and base people, for the most part low-class and immoral.”

Former government official in Minas Gerais José João Teixeira Coelho wrote an “Instruction for the Government of the Captaincy of Minas Gerais,” in which he warned about the laziness and disorganization of the people there:

The lack of police in the captaincy of Minas Gerais disturbs order there. The majority of the inhabitants of this captaincy either have come directly from Europe or are born of Europeans. They arrive here excited and with the hope of advancing their fortunes. The majority of them were either criminals or persons who at home had no more than what they earned with their hoe or by the offices they held. These men, who in Portugal were the scum of the masses and the despair of the elite, come to this enormous land of freedom to make themselves insolent and to play the role of nobles.

? What sort of education can men of that kind give to their children? What virtues do they have which serve as examples for their own children? All of them refer to themselves as distinguished men and for that reason they deprecate work, living in idleness and thereby depriving the State of hundreds of workers (Burns 159-60).

The shift from agricultural production to mining led to widespread upheaval. Between 1697 and 1701 Brazil experienced two famines, and food grew so valuable in the interior that merchants on the coast took to speculating, refusing to sell food products in their own region because they knew they could sell them at a much higher price in Minas Gerais. Thus prices rose everywhere, and all residents of Brazil felt the effects of the drive for gold.

The Crown’s Response

Royal authorities in Coastal Brazil did not know exactly how to think about the gold rush in Minas Gerais. In Lisbon in January of 1701 Dom João de Lencastre lauded the discovery of gold, as he thought it would lead to prosperity for all. However, he also briefly mentioned that large quantities of gold could threaten Brazil’s foreign relations. It might lead to trading gold away for other necessary items, “so that these countries (with which the Portuguese empire trades) will have all the profit and we will have all the work.” Dom João was foreshadowing the relationship between Brazil, Portugal and Great Britain under the 1703 Methuen Treaty. Still, in March of 1701 the Crown had very little idea of the amount of gold being found in the mining districts. It was still worried about the declining sugar and tobacco industries, and with a shortage of labor in these industries as many black slaves accompanied their masters to the interior to mine.

The Crown saw a way to capitalize on the gold discovery by levying a 20 percent tax known as the Royal Fifths tax or quintos. However, it was difficult to collect from unruly miners in a remote and loosely governed area of the country, and smuggling gold out tax-free became a common practice.

Royal Tax and Mine Governance

At the beginning of the gold rush in the mid-1690s, the Fifths tax was levied on all gold brought out of the mining areas. The idea was to have miners bring their gold to one of four smelting houses to have it melted down into bricks after deducting the Crown’s share. This method, however, proved to be inefficient because there was only one smelting house near the mines and it was quite simple to just bypass the system altogether.

In order to better regulate the Fifths tax, Artur de Sá established a system whereby agents patrolled the routes to and from the mining areas ? only if merchants had a receipt from one of the smelting houses could they advance. Official reports show that 36 people in 1701 and only 11 people in 1702 paid the tax, an inexplicably small number considering there were about 30,000 people engaged in mining.

Stricter law enforcement measures were adopted when Governor Carvalho took office in 1710 ? he immediately gathered senior political officers to meet and create a plan. A new system of avencas was enacted that required miners to pay a tax on all mining pans used and slaves employed.

The anarchical aspects of mining society translated directly to complete disregard for the Fifths tax laws. Miners often purchased materials and goods such as cattle inside the mining area so as to get rid of the gold but still have the ability to transfer something of intrinsic value out of Minas Gerais without being taxed. Soon the government caught on and levied a tax on unregistered cattle entering and leaving Minas Gerais.

If caught dodging a Fifths payment, a person’s gold was confiscated, with two-thirds of it going to the treasury and one-third to the person who reported the fraud ? incentivizing the policing of roads. Tax evaders would also be imprisoned, as this was considered fraud against the treasury.

Slaves

Struggling to monitor miners, enforce the laws of the Treasury, and limit the flood of people entering Minas Gerais, government officials took new steps to regulate the region. Dom João de Lencastre implemented a law in 1701 that required people wishing to enter the mining area to bring a passport signed by the governor-general of Bahia, Rio de Janeiro or Pernambuco. Passports were given only to “people of credit and substance” ? not slaves. Again, enforcement was difficult.

The Crown stated in 1701 that only 200 black slaves could be imported per year from West Africa to the mines via Rio de Janeiro. In 1711 it became illegal for slaves who worked in agriculture to work in the mines unless they were not fit for work in the sugar refineries ? a government effort to protect agricultural exports.

Despite the laws and restrictions, thousands of slaves left their coastal jobs to work in the mines for their masters. In addition, miners illegally imported slaves from Guinea, paying with gold dust and bars that had not gone through the Fifths tax ? another way to shed gold while keeping a transportable asset.

This is an ink etching of slaves washing for diamonds and gold in a river.

• How are race, gender, and social status illustrated in this image? How do the different roles of the figures vary based upon these stereotypes?
• What do the Crown ordinances regarding slaves work in mines show about slaves’ role in the Brazilian economy? How did that role change from the introduction of African slavery to the gold boom of the 18^th century?

Mining’s Effect on Sugar

Brazil’s sugar exports rose quickly through 1650 when the Dutch left Pernambuco. When the gold rush began in the 1690s engenho, or sugar mill, owners and slaves headed to the interior to mine gold. Consequently the supply of sugar fell, leading to a drastic rise in prices. The price of an arroba of sugar in 1634 was 800 reis and in 1700 the price reached an all time high of 2,200 reais per arroba.

Another factor in the great sugar inflation was the increase in the cost of labor. The interior mining endeavors required slaves and high demand brought high labor prices, which made sugar production less profitable. At the same time, demand for sugar was not as high because people were not home to consume sugar ? they were too busy mining. This further shrank sugar producers’ profit margins.

Given that overall output in Brazil’s previously agriculturally focused economy was down, the Crown changed the focus to gold mining and encouraged engenho workers and owners to mine for gold. This would produce more revenue for the Crown. In 1650 sugar made up 95 percent of Brazil’s total exports and gold and other minerals were 5 percent; in 1750 sugar was just 47 percent of total exports, while gold was 53 percent.

The Trickle-Down Effect

Dom João’s prediction that in the gold trade, other countries would “have all the profit and (the Portuguese empire would) have all the work” turned out to perfectly describe the long-run effect of the Methuen Treaty on Brazil, Portugal, and Britain. Under the 1703 Methuen Treaty, Portugal was given English textiles and manufactured goods in exchange for Britain receiving favorable tariffs on importing Portuguese wines. This arrangement effectively funded Britain’s industrial revolution; gold flowed steadily out of Portugal to Britain, while Portugal only received textiles in return. Instead of financing the development of Portugal and its colonies, Brazil’s natural resources could not prevent Portuguese coffers from depleting rapidly. Ultimately the empire would experience little gain from its “golden age.”

• In what ways did the Methuen Treaty place Portugal at a disadvantage economically and diplomatically?
• Why did Portugal agree to the treaty? What other factors in the country’s foreign policy made the treaty appealing?
• What was the impact of the economic devastation caused by the unfavorable balance of trade on Portugal’s colonial policy in Brazil?

Further Reading

• Kathleen Higgins’ “Licentious Liberty” in a Brazilian Gold-Mining Region: Slavery, Gender, and Social Control in Eighteenth-Century Sabará, Minas Gerais looks at the condition of the mining towns that suddenly emerged in the interior during the gold rush, particularly in terms of the effect of limited rule of law on marginalized populations.

Sources

• Alden, Dauril. Colonial Roots of Modern Brazil; Papers of the Newberry Library Conference. Berkeley, Calif.: University of California Press, 1973.
• Boxer, C. R. Golden Age of Brazil: 1695-1750. Los Angeles: University of California Press, 1969.
• Burns, Bradford. A Documentary History of Brazil. New York: Alfred A. Knopf, 1966.
• Diffie, Bailey W., and Edwin J. Perkins. A History of Colonial Brazil: 1500-1792. Malabar, Fla.: Krieger, 1987.
• White, Robert Allan. “Fiscal Policy and Royal Sovereignty in Minas Gerais: The Capitation Tax of 1735.” Academy of American Franciscan History 34 (1997): 207-229. JSTOR. Web. 1 Dec. 2011.

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