Abstract
Brazil experienced three moments of exuberance and extreme optimism during the nineteenth century: Independence, Abolition of the Slave Trade, and Abolition. At each of these moments, contemporaries felt that a major obstacle to progress had been removed and that the country would finally be able to capitalize on its enormous potential. Around each event, politically active individuals, including professionals, merchants, and civil and military officials, sought to emulate the institutions of the more “advanced” economies now that this obstacle – political dependence, the inhuman and expensive slave trade, and slavery itself – would no longer interfere with progress. This article deals with the period of the abolition of the slave trade and a visionary politician, Bernardo de Souza Franco (1812-1875), who strove to utilize banking reform as an engine of growth.
Brazil’s first privately-controlled Banks arose in various provinces during the 1840s and early 1850s. In 1853, the Conservative ministry in power forced the merger of the two privately-controlled banks headquartered in the capital and soon after absorbed all the provincial banks into this government-controlled Banco do Brasil. Souza Franco, as minister of finance in 1857-’58, granted licenses to six new privately-controlled institutions to establish themselves as banks of issue and competitors of the Banco do Brasil.
Although Conservatives subsequently curtailed issue privileges, several of these banks had distinguished careers, one of which still exists today. In addition to bank reform, Minister Souza Franco played a fundamental role in the foundation of Brazil’s four major railroads and advocated gradual abolition, European immigration, provincial autonomy, limited liability, industrial protection, and enhanced education.