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The role of coffee in the creation of institutions in Brazil: 1830--1930

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The role of coffee in the creation of institutions in Brazil: 1830--1930

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Content THE ROLE OF COFFEE IN THE CREATION OF INSTITUTIONS IN BRAZIL: 1830-1930 by Vitoria Saddi A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY POLITICAL ECONOMY AND PUBLIC POLICY December 2002 Copyright 2002 Vitoria Saddi R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. UMI N um ber: 3 0 9 3 8 0 9 UMI UMI Microform 3093809 Copyright 2003 by ProQuest Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. UNIVERSITY OF SOUTHERN CALIFORNIA THE GRADUATE SCHOOL UNIVERSITY PARK LOS ANGELES, CALIFORNIA 90089-1695 This dissertation, written by under the direction o f hJUy_ dissertation committee, and approved by all its members, has been presented to and accepted by the D irector o f Graduate and Professional Programs, in p a rtia l fulfillm ent o f the requirements fo r the degree o f DOCTOR OF PHILOSOPHY D irector D ate lO ~ 1 3 - CZ_ Dissertation Committee O f 1 1 Chair R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. ii ACKNOWLEDGMENTS Many individuals provided me with support and encouragement before and during the preparation of this dissertation. My heartfelt thanks goes to my advisor, Jeffrey B. Nugent, for his patient support from my initial research proposal to this final product. My advisor guided, stimulated and encouraged this dissertation from its inception to the end. Professor Nugent went above and beyond his formal responsibilities as an advisor to write papers with me, as a way of clarifying my ideas. In the whole process, I appreciate his comments, questions, criticisms which helped me to hone a very broad project into a focused dissertation. While the errors are mine, I share any credits of this dissertation with Professor Nugent. Steven M. Helfand generously gave this project his careful reading, incisive comments and expertise on Brazilian economy which served only to strengthen it. I thank Nora Hamilton for her reading and extremely appropriate comments. I am grateful to Professor Gerard Bakus for the interesting summary on the biology of coffee. Conversations with Steven Topik also have provided useful insights. My sincere thanks to Faride Motamedi and the late John Elliott for introducing me to the Political Economy and Public Policy program. As a teaching assistant for the department of Economics, I had the privilege to work under the supervision of Richard Easterlin. His support and unconditional trust in my work meant a lot to me. A very special thanks to my students, both at USC and Cal State University at Long Beach, who were a source of inspiration almost everyday of my life. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. iii During the field work in Brazil, I found the support of archivists and librarians that made my research easier. Robson da Silva (Arquivo do Estado de Sao Paulo), Dora Lucia de Lima Simas (Sociedade Rural Brasileira), Luciana da Costa (Associacao Comercial de Sao Paulo) and Vandete Pereira N. de Medeiros (Institute de Economia Agricoia) guided me through their collection and helped me finding all the material I needed to write this work. My thanks to Francisco Pino, head director of Institute de Economia Agricola, for explaining the methodology of the early census data, for his precise and prompt answers to my long emails and for always making himself available to my requests. I am lucky to have such a great group of life long friends, Arthur Barrinuevo, Ricardo Meirelles, Silvio Miazaki and Jose Marcio Rego. I thank them for all our moments together and for always being in my life. My thanks to my former professor, Luis Carlos Bresser Pereira for Ms support and help in different stages of my life. Yoshiaki Nakano, great friend, mentor and former advisor, deserves special credit for nurturing me ever since college, for being so kind, generous and patient with me, a young and highly stubborn pupil. During this process, I lost three of my dearest friends, Marta Fantini, Claudio Sato and Cel so Daniel. Their early deaths also took part of me, ‘saudade’. My family has always been the driving force that keeps me going. My mother, Maria Jose, provided me with great insights (during long international calls) that I used throughout this work. I thank my father, Rafic, for loving and supporting whatever I do. My love and deepest gratitude goes to the two of the brightest, witty, R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. beautiful, funny and loving girls I have ever met, my sisters, Carla and Loreta Saddi. My grandparents, Lila and Lamartine, are a source of light and inspiration. Last but not least, I thank my husband, Robert, for being so supportive of my work, for reading and editing my early drafts and for offering me nothing but encouragement throughout this process. It is to my beloved family that I dedicate this dissertation. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. TABLE OF CONTENTS ACKNOWLEDGMENTS..................................................................................... li LIST OF TABLES. IX ABSTRACT CHAPTER 1. INTRODUCTION ........... ...... ............. 1 CHAPTER 2; LITERATURE REVIEW ...... 6 2.1 Brief Overview of the Literature on the Coffee Period (1830-1930)........... 11 2.1.1 The Seminal Works on Coffee Period.............................................................. 11 2.1.2 The Regional Studies...................................................................................... 18 2.1.3 Politics, Politicians During the Coffee Period.................................................23 2.1.4 The Thematic Studies............................................................ 27 2.1.4.1 The Credit and Money Markets................................................................ 27 2.1.4.2 The Industrialization During the Coffee Period.......................................29 2.1.5 Theories of Development of Private Property Rights in Land...................... 31 2.2 The ‘Distorted Consensus’ on Coffee: the Land Market..... ................35 2.2.1 The Land Laws................................................................................................ 35 2.3 The Aspects of the ‘Distorted Consensus’ in the Labor Market.................... 40 2.4 The Laws According to the Lawyers and Legislators ................... 42 2.5 Conclusions ...................................................... 45 CHAPTER 3: THE DETERMINANTS OF THE 1850 LAND LAW DURING THE EMPIRE PERIOD IN BRAZIL............................ 47 3.1 Determinants of the 1850 Land law..................... ..49 3.1.1 The Previous Conditions in The Land Market................................................49 3.1.2 The Political Conditions................................................................................... 51 3.1.2.1 Relations with England..............................................................................51 3.1.2.2 - Revenues from Trade ....................................................................53 3.1.2.3 The Politics of the Coffee Producers...................................................... 56 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. VI 3.1.3 The Restrictions in the Labor Market: The Labor Laws................................58 3.1.4 The Origins of the 1850 Land Law...................................................................61 3.2 The 1850 Land Law ....... 69 3.3 The 1854 Statute................... 71 3.4 Conclusions ............ 74 CHAPTER 4: IMPACTS OF THE 1850 LAND LAW ON THE LAND LAW ON THE LABOR, LABOR AND CREDIT MARKETS ...... 77 4.1 The International Market for Immigrants.. ...... 80 4.2 The Impacts of the 1850 Land Law in the Labor Market ....... 82 4.2.1 The Impact of the Provincial Laws on the Paulista Labor Market................92 4.3 The Impacts of the 1850 Land Law in the Land Market ...... 95 4.4 The Impact of the 1850 Land Law in the Credit Market ....................100 4.5 Land Rights, Immigrants and Coffee: from Rio to Sao Paulo in 1886....... 105 4.6 The Role of Sao Paulo and Immigrants in the Creation of a Republic........108 4.8 Conclusion.. ..... 113 CHAPTER 5: THE DETERMINANTS OF THE LAND AND LABOR LAWS IN SAO PAULO DURING THE OLD REPUBLIC (1890-1930)............ ..116 5.1 Institutional changes in the land and labor market during the Old Republic in Sao Paulo (1890-1930)...... 120 5.1.1 The 1895 Land law........................................................................................... 120 5.1.2 The 1907 Labor (Immigration) law.................................................................122 5.1.3 The 1921 Washington Luis Land Law........................................................... 124 5.2 The Short-Term Determinants of the Laws.... ................. 126 5.4 The Long-Term Determinants of the Institutional Changes During the Old Republic ..... 130 5.4.1 Formal and Informal Land Rights in Sao Paulo and Minas Gerais...........139 5.5 Conclusion ..... 142 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. CHAPTER 6: THE IMPACTS OF THE LABOR AND LAND LAWS AND THEIR LINKAGES IN THE. LAND, LABOR AND CREDIT MARKETS W SAO PAULO DURING THE OLD REPUBLIC (1890-1930)...........................145 6.2 The Impacts of the Labor and Land Laws on the Labor M arket: Sao Paulo 1890-1934 .................................... 150 6.2.1 The Sao Paulo Immigration Program: Main Features................................... 150 6. 2. 2 Spontaneous Immigrants and Industrialization in Sao Paulo: 1890-1930.155 6.2.3 The Upward Mobility of the Subsidized Immigrants: from ‘Colonos’ to Coffee Producers........................................................................................................158 6.2.3.1 Immigration Policies and Settlements: Further Increases in Landownership 1906-1920....................................................................................166 6.2.3.2 The Third Phase of Improvement in Landownership: 1921-1934.........170 6.3 The Impacts of the Labor and Land Laws on the Land M arket, Sao Paulo (1890-1934)..... 173 6.3.1 The Creation of Small Size properties: An overview................................... 173 6.3.2 Farm Size and Productivity............................................................................. 175 6.3.3 A Comparison of Land Tenure Among the Coffee States: Sao Paulo, Minas Gerais and Rio de Janeiro ................................................................................ 177 6.4 The Impacts of the Land and Labor Laws in the Credit M arket: Sao Paulo (1890-1930)................................. 179 6.4.1 The Quality Problem and the 1906 Taubate Agreement...............................179 6.4.2 Immigrants and Brazilians in the Provision of Credit and Transportation for the Western Farmers.................................................................................................. 184 6.4.3 An Application of Staple Theory to the Coffee Economy........................... 186 6.4.4 Statistical Tests: The Precision of the Land Laws.........................................189 6.5 Conclusion ...... —................. 198 CHAPTER?. CONCLUSIONS........................................................................202 REFERENCES ...................................................................................................215 APPENDIX 1 - REGIONAL DIVISION OF SAO PAULO AND THE BIOLOGY OF COFFEE......— ............ 238 APPENDIX 2t METHODOLOGY FOR THE INDEX OF LEGAL CHANGE ..... 249 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. APPENDIX 3: METHODOLOGY OF THE RURAL CENSUSES: SAO PAULO AND BRAZIL, 1905-1930..................................... .......................... R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. ix LIST OF TABLES Table 2.1: Overview of Brazil and the Coffee Region3: 1830-1930............................. 6 Table 3.1 Leading Brazilian Export Products as a Percentage of Total..................... 54 Table 3.2: Coffee Production and Population in Sao Paulo and Rio de Janeiro: 1836...................................................................................................................................55 Table 3.3: Slave Imports to Brazil: 1822-1855............................................................. 60 Table 4.1 Amount Spent with Public Land and Colonization, Annual Budget and Number of Immigrants: 1841-1889 ....................................................................... 83 Table 4.2 Agriculture Ministry Annual Budget per Expense Category: 1864- 1889(%)............................................................................................................................ 90 Table 4.3 Number and Area of Private Properties Legalized by the 1850 Land Law ..................................... 95 Table 4.4 Number of Parish Priest Registrations..........................................................96 Table 4.5 Public Land Measured in 1885...................................................................... 99 Table 4.6 Coffee Production and Population in Sao Paulo and Rio de Janeiro: 1886.................................................................................................................................106 Table 4.7 Coffee Production in Sao Paulo and Rio de Janeiro, 1836-1886.............. 107 Table 6.1 Sao Paulo State Taxes: Total, Coffee tax, Immigration expenditures, Immigration numbers 1892-1930..................................................................................153 Table 6.2 Landownership and Population in the Rural Areas of Sao Paulo by Zone and Nationality: 1905........................................................................................... 159 Table 6.3: Rural Establishments and Population by zone and nationality: 1920..... 167 Table 6.4: Total Number of Rural properties in Western Sao Paulo as compared to the total number of coffee farms by nationality, 1920, 1923............... 169 Table 6.5: Total Number of Rural properties in Western Sao Paulo and total number of coffee farms by nationality, 1932-1934.....................................................171 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. Table 6,6: Total Number of Coffee Trees and Planted Coffee Area by nationality, 1932............................................................................................................. 171 Table 6.7 Sao Paulo State 1905, 1920 and 1930: Comparative Size of Rural Properties and Areas of Rural Properties..................................................................... 174 Table 6.8: Farm Size and Land Productivity, Sao Paulo: 1934................................. 176 Table 6.9: Land Tenure Among the Coffee Producing States: Number of Properties Mortgaged..................................................................................................... 177 Table 6.10: 1920 Land Prices in the Coffee States: proxy for Land Tenure...........178 Table 6.11 : The Total Precision of Land Rights Index and Annual Changes in Brazil and Sao Paulo land law (1850-1930)................................................................193 Table 6.12: Regressions for the Annual Change in the Precision of the Land Law (ACLt) in Brazil and Sao Paulo, 1850-1930....................................................... 196 Table 6.13 Regressions for the Total Precision of the Land Law (TPLt): Brazil and Sao Paulo, 1850-1930........................................................................ 198 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. xi ABSTRACT Land in Brazil is the common theme that binds together the seven chapters of this dissertation. The political and economic use of land is evaluated over one century (1830-1930) by a through study of the land and labor laws. The objective of this dissertation is to show that the historical evolution of landownership in Brazil during the Empire (1822-1889) and in Sao Paulo during the Old Republic (1890- 1930) did not follow the evolutionary theory of property rights, where an increase in the price of land induces changes in the current legal system in the direction of well- defined property rights. A second objective is to show that the literature on the theme has led to a distorted view about the coffee period, especially with respect to the land and labor policies. We analyze the determinants of the first land law enacted in Brazil in 1850 to show that the legislation was mainly designed to solve problems in the labor market and not to regulate private property rights. We then address the impacts of the 1850 land law on the land, labor and credit markets. The fifth chapter covers the institutional changes in the Old Republic in Sao Paulo (1890-1930) and examines the short and long term determinants of the land and labor laws enacted by the state. We explain why these were extremely credible laws that enticed immigrants to become coffee producers. In the sixth chapter we expand the analysis to study the impacts of these legislations on the land, labor and credit markets. This work proposes two contributions. The first is to show that the concentration of land in Brazil bears no relationship with the perceived ‘failure of the 1850 land law’. The second addresses the New Institution Economics to suggest that the evolutionary R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. theory of property rights should be amended to take into account why and how private property rights were first created in Brazil and in Sao Paulo. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 1 CHAPTER 1. INTRODUCTION The common theme that unifies the six chapters in this dissertation is the political and economic use of land in the coffee producing regions of Brazil during the Empire (1822-1889) and the Old Republic (1890-1930). The objective of these chapters is to show that the historical evolution of landownership in Sao Paulo did not follow the steps dictated in the neoclassical “evolutionary theory of private property rights”, where an increase in the price of land induces changes in the current legal system in the direction of well defined land rights. In Rio de Janeiro and Sao Paulo, Brazil's two leading coffee states during the Empire, the evolution of landownership was driven by the dynamics in the labor market, not by the price of coffee or the price of land. In this period, in 1850 to be precise, Brazil enacted a land and colonization law, whose main goal was to attract immigrants and not to define land rights. Through the land law the country succeeded in attracting more than half a million of immigrants even before the fall of the Empire in 1889. Among other things, immigrants were granted plots land to entice them to come to Brazil. However, as early as 1870s the provincial governments began to receive more power to enact laws dealing with slavery and immigration. As a result, Sao Paulo began to distinguish itself from Rio and other provinces in these respects. By 1890, Sao Paulo had the largest population of immigrants and Rio had fallen from first to fourth in numbers of immigrants. During the Old Republic (1890-1930), Sao Paulo was the only state in Brazil that continued to attract immigrants on a large scale. This was R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 2 because the political elite of this state was in fall agreement on the need to attract immigrants. Hence, the laws and incentives favoring immigration became increasingly more credible relative to those of the other states by farther fostering land rights. At the same time, success in this respect had the effect of decreasing the size of rural plots. The second chapter of this dissertation is a review of the literature that analyzes the impacts of coffee on the markets for labor and land. This chapter begins by identifying some important points of agreement among authors of various different nationalities, political persuasions and intellectual traditions. Yet, several of these points of agreement provide a distorted view of the coffee system and how it worked. One of them is the "failure” of the 1850 land law. Others were the contentions (1) that coffee was produced almost exclusively in 'latifandia' until 1930, (2) that immigrants were unable to buy coffee lands and (3) that Sao Paulo's land rights did not strengthen during this period. Yet, it is our view, as demonstrated in the third chapter, that the Land Law of 1850 succeeded in accomplishing its major objective, namely, attracting large numbers of immigrants to Brazil, even during a time in which slavery continued to exist. Our research, based on both original and secondary sources, shows that the determinants of the 1850 land law were found in the labor market and not in the land market. The law created a set of incentives to attract immigrants and as such, was a R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 3 forward looking policy implemented to prevent shortages in the labor market that would emerge when the abolition of slavery became complete. The fourth chapter analyzes the effects of the 1850 land law on the labor market, land market and credit market. In the labor market the law created the financial incentives required to allow Brazil to compete with the other ‘new countries’ in the market for immigrants. In the credit market, the law did not induce land to become a collateral. However, there were no serious credit constraints in Sao Paulo, mainly because of the close-knit relations between coffee producers and coffee “factors”. In the land market, the main impact of the 1850 law was that immigrants received titles on their lands whereas Brazilians did not. Because the intention of the law was to attract immigrants, the government, private colonization companies and coffee producers built settlements and granted titled land to foreigners that came to Brazil. An interesting result is that the increase in coffee prices did not lead to an increase in land rights, as dictated by the original theory of property rights. The fifth chapter picks up this institutional story in the Old Republic period. The main goal of this chapter is to show that the desired inflow of immigrants into Sao Paulo induced the interest groups and policy-makers of that state to enact the laws and regulations to make credible their immigration policy. The slogan ’ braces para a lavoura' was the main determinant of the land and immigration laws enacted during this period. However, these were credible laws because there was an agreement on this policy orientation at the state level that was buttressed by the informal political R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 4 power at the county level, in a time where the ’ colonel' dictated the creation of new counties, we observe the proliferation of new municipalities in the western frontier, where immigrants formed the majority o f the population and owned more than half of the land. By contrast, other coffee producing states like Minas Gerais also made some legal and other institutional changes but these were nowhere near as effective and credible to immigrants and as a result immigrants did not come there. In fact, the purpose seemed to be quite different, namely, to raise revenue in the form of a land tax. The sixth chapter focuses on the effects of these different laws and institutional changes during the Old Republic on the land, labor and credit market. In the labor market, the immigration policy fostered by Sao Paulo solved the shortage of labor in the coffee farms but also produced linkages in fostering industrialization (a great number of immigrants owned the first industries in Sao Paulo) and agriculture (a equal number of immigrants became coffee producers). In the credit market, the main impact of these laws was the increasing use of the Torrens system of registration, especially for rural lands, that in turn induced commercial banks started to accept land as a collateral. In the land market, between 1905 and 1930 the percent of latifundia decreased substantially and that of small holders increased. A by product of this essay is to demonstrate the inaccuracy of the 'distorted consensus' saying that coffee was produced almost entirely by Brazilians in 'latifandia' type of plots until 1930. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 5 This dissertation makes two general contributions. The first is one to the New Institutional Economics. The evolution of land policy, in Brazil during the Empire and in Sao Paulo during the Republic, is an excellent case study for investigating the issue of institutional change and economic performance. Our research suggests that private property rights were created to attract immigrants and not because of the increase in the value of the land. The second contribution is more specific to the economic history and political economy literature on Brazil's coffee period (1830- 1930) and to the effects of these legal and other institutional changes on land, labor, credit markets and linkages. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 6 CHAPTER 2: LITERATURE REVIEW Throughout much of its history, Brazil has been known as a raw material exporting country. While earlier these exports were sugar, natural dyes, gold and other minerals, beginning in 1830 coffee became Brazil’s single most important commodity export. As shown in Table 2.1, moreover, between 1830 and 1930, the share of coffee in total exports grew steadily. By 1889, the country was already responsible for about two-thirds of the world’s total coffee supply. These accomplishments were even more remarkable if one considers that this was a period in which world coffee exports were growing at a phenomenal rate (more than quintupling between 1839 and 1890 and then tripling again between 1890 and 1930). Table 2.1: Overview of Brazil and the Coffee Region8: 1830-1930 1830 1850 1872 BrazslJ Coffee Region Brazil Goffee Region Brazil Coffee Region Area (in 1,000 km2 ) 8,511,189 884,620 8,511,189 884,620 8,511,189 884,620 Total Population z , m , 866 2,121,000 7,617,800 3,000,000 10,112,081 4,034,619 % of slaves 29% 39% 13% 18% 17% 22% % of immigrants 0.20% 0.05% 0.20% 0.03% 3% 7% % of adults literacy na na na na 16% 19% Life expectancy m m na na 27.3 na Inflow of Immigrants up to 7,882 955 17,044 953 279,582 10,458 Political Regime Parliament Monarchy Parliament +Monarchy Parliament +Monarchy Coffee exports as % of total 20% na 40% na 56% na % of world coffee market tva na 52% 52% 50% 50% Length of railroads (in km2 ) 0 0 15 15 1,357 1,053 Real GDP (1908=100) na na 35.54 na 64.47 na R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 7 Table 2.1: Overview of Brazil and tie Coffee Region3: 1839-1930 (c o o t.)____________ _______________________________________ ____ _______ 1900 | 1920 1930 Brazilj Coffee| Region Brazifj I Coffee Region Brazill I Coffee Region Area (in 1 ,Q Q Q t o 2 ) 8,511,1® 884,620 8,511,189 884,620 8,511,189 884,820 Total Population 17,318,553 7,494,350 30,838,301 13,288,005 37,825,436 16,249,906 % of staves 0% 0% 0% 0% 0% 0% % of immig-ants 7.3% 0.0% 5% 9% 3% 7% % of adults literacy 26% 28% 24% 28% 26% 32% Life expectancy (in years) 29.4 na 32,1 na 34.3 na Inflow of Immiyants up to 6 2,141,869 961,881 3,630,243 1,785,979 4,470,558 2,272,228 Political Regime Federative Republic Federative Republic Federative Republic Coffee exports as% of total 57% na 82% aa 46% na % of world coffee market 78% 75% 70% 66% 62% 57% Length of railroads (in km2 ) 13,981 8,714 28,556 13,441 32,000 18,326 Real GDP (1908=100) 74.79 na 171.49 na 266.53 na Sources: For Area: Anuario Estatistico do Brasil 1940, numero 1 p. .X VI. For population: Estatisticas Historicas do Brass! vol. 3, 1987., p. 29, 30, Anuario Estatistico do Brasii, 1940 p. 6,7, 8, 17. For literacy rates: Anuario Estatistico do Brasil, 1940, p. 13. For life expectation: Merrick & Graham (1980), p, 42. For inflow of immigrants: Boietim do Servico de Imigracao, Sao Pauio, 1940. For coffee exports and world coffee market: Bacha (1992). For length of railroads: Oliveira (1995), For Real GDP: Bacha (1992) (a) coffee region is composed by: Sao Paulo, Rio de Janeiro and Minas Gerais. (b): For 1830, inflow between 1821 and 1830. For 1850, number of immigrants between 1830 and 1850. For 1872, numbers between 1830 and 1872. For 1900, numbers between 1830 and 1900. For 1920, numbers between 1830 and 1920. For 1930, numbers between 1830 and 1930, For the coffee region, number of immigrants to Sao Paulo only. According to the ‘dominant’1 approach reviewed in this essay, coffee was almost entirely produced on large plantations and until the abolition of slavery in 1888, the labor force was largely slave labor 2 With the complete abolition in 1888, immigrants became increasingly important as the dominant source of labor supply. 1 The main representatives o f this approach are: Prado Jr. (1966) and (1979), Furtado (1965, Stocke (1986) and Dean (1971) and (1976a). 2 Between 1822 and 1889, Brazil was an Empire. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 8 At the same time, Sao Paulo came to surpass Rio de Janeiro as the leading coffee province in Brazil. The ‘conquering of the west’ in Sao Paulo by coffee producers was closely related to the growth of Brazilian railroads and a number of other factors explored in this dissertation. Since coffee has a long gestation period between first planting and production, credit was also required. Coffee producers looked to the state for assistance in supplying ail their needs: land, low cost labor, credit, railroads, marketing, storage and price stabilization and support. Conventional analysis3 has tended to view coffee producers as homogeneous (large, mostly Brazilian plantation owners) and as all-powerful in the political economy sense throughout the period 1830-1930. Likewise, conventional analysis4 has portrayed immigrants as ‘semi-slaves’ who were so poor that they could not afford to save to acquire coffee land. The conventional analysis also views Sao Paulo as being no different from the rest of Brazil’s coffee region5. The coffee producers’ monopoly of land enticed them with the control over the labor force. The current view is that coffee producers (or the state) did not stimulate immigrants to acquire coffee lands6. In fact, conventional analysis has also argued that coffee producers were ‘free-riders’, using the state for their own private interests. The institutions created by coffee producers tended to retard economic growth. Conventional analysis 3 The main representatives are: Prado Jr. (1966), Stocke (1986) and Martins (1986). 4 According to Hall (1968), Truzzi (1986 m d Dean (1976a), 5 According to Prado Jr. (1979). 6 Dean (1976a). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 9 also Implied that the concentration of land that started during the colonial period increased even farther during the coffee period.7 Broadly speaking, this dissertation proposes a non-conventional (or fresh) analysis of the coffee period. We find, through the study of the land and labor policies, that the coffee economy created institutions that improved private property rights, increased credit and transportation and decreased the concentration of land. If in 1830 coffee was produced by Brazilians, mostly in latifandio type properties, in 1930 immigrants owned more than 50% of total coffee farms in Sao Paulo. But how can we have two so distinct approaches to the same subject? In this chapter, we review two broad sets of works: the consistent consensus and the ‘distorted consensus? The first one has been registering a lot of progress lately, with an increasing number of excellent contributions on the coffee period. The second type of consensus has not evolved much lately, and needs improvement. In fact, we found some consensual aspects in this second field that produced agreement among the authors. The problem is that we also found such ‘agreement’ to be imprecise and vague, leading us to call this second approach ‘the distorted consensus’. One should not get the wrong impression that all that has been done is incorrect and that our intention is to propose a new set of paradigms for the Brazilian coffee period. On the contrary, we benefited immensely from a great number of works. Indeed, without them we would not be able to go further. In this sense, we 7 Prado Jr. (1979). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 10 have two major goals to accomplish in reviewing the literature. The first one is to provide a broad review of the works that influenced this dissertation, and that we consider to among the best in the field. The second and more specific objective is to specify the extension of the ‘consensus’, the main authors, their contributions and the ways in which our approach differs from theirs. This chapter is divided into five sections. In 2.1 we give a broad overview of the literature on coffee, under the group we called ‘consistent consensus’. In 2.1.1, we review the seminal works that provided the ‘foundations’ for the later development of the literature. The regional approaches, analyzed in 2.1.2, are extremely important contributions towards a more specific understanding of the economic and political impacts in one specific municipality or region, during the coffee period. The different political structures of the two periods (Empire and Republic) discussed in Section 2.1.3 are pre-requisites for understanding the land and labor policies implemented during the two periods and analyzed later in this dissertation. In sub section 2.1.4, we discuss the thematic studies in two areas: the credit and money market and the role of coffee in fostering industry. We call these ‘thematic studies’ because they study in depth all the impacts of one single problem. Mainly because we deal with land rights, we present an overview of the different theories of property rights in 2.1.5. Then, in Sections 2.2, 2.3 and 2.4 we tried to accomplish our second objective. As such, in 2.2 we summarize the research that focuses on the transformations of the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 11 land market (between 1830 and 1930). Interesting enough we found very few contributions on this theme, but we then found many works on the concentration of land in Brazil, especially in Amazonia8 , that use these studies as the primary/historical reference. In 2.3, we review the works on the labor market, with special emphasis on the role of immigrants during the Empire (1822-1889) and then in Sao Paulo during the Republic. In particular, we examine the role played by the immigrants in the coffee economy and the possibility of mobility from being workers to coffee producers. Throughout this dissertation, we deal with land and labor laws, and sometimes their interpretation by magistrates. In turn, we review in 2.4 the few outstanding contributions that discuss the land policies in Brazil before 1930. A summary of our conclusions is in section 2.5. 2.1 Brief Overview of the Literature on the Coffee Period (1830-1930) 2.1.1 The Seminal Works on Coffee Period In our view, some of the most relevant works on coffee are identified with the names of Emilia Viotti da Costa (1982), Caio Prado Junior (1979), and Celso Furtado (1964). In different degrees, these works encompass the whole coffee story (Empire and Republic) and to some extent integrate labor, land, credit and politics in their analysis. Emilia Viotti traces a whole view of the coffee economy to explain under what condition slavery was abolished, the pressure groups involved, the role 8 Indeed according to Foweiaker (1981), the 1850 land law remained in M l force until 1964 in Amazon region, parts o f Parana, Mato Grosso and Pam R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 12 played by Sao Paulo and the importance of the immigrants in this transition. She explains that the peaceful transition towards free labor was mainly due to the introduction of immigrants in the coffee provinces of the south and the laws indicating to the slave owners that slavery as an institution was coming to an end. In contrast to the U.S. experience, the author explains the peaceful transition from slavery to free labor due to the positive conditions created by the coffee economy. Implied In her work is the idea that there was fierce opposition from farmers from the Paraiba valley (the old coffee region located north of Sao Paulo) who defended slavery. The complete abolition, in 1888, marked the emergence of the western planters from Sao Paulo, as an important pressure group in both political and economic terms. While Emilia Viotti (1982) provides a broad overview of the coffee economy with special attention for the labor market, Caio Prado Junior9 is concerned with the land market. More specifically, he establishes a relationship between the latifundio1 0 and the backwardness of Brazil. In his view, the plantation is characterized by exploitation of the workers by the landowners. Ever since colonial times, Brazil was 9 His major works are'. A Revolucao Brasileira (1966), Fomaacao do Brasil Contemporaneo (1969), and Historia Economica do Brasil (1979). 1 0 Latifundio is an economic and political term, specific to Brazilian land policies. According to Helfand (1999):” Many Latin American countries adopted agricultural policy packages in the 1960s aimed at modernizing latifundios (extensive large estates), as a part of a strategy to control the pressure for land reform. “ (p. 6). While latifundios are ‘extensive large estates’ what differs this type of land holding from ‘plantation’ or even from large size farms is the use of land. In latifundios we find vast idle and unproductive tracts of lands, whereas in a plantation or even in a large land holding we do not find such a pattern on a regular basis. In legal terms, the Brazilian civil code classifies unproductive (or idle) land as ‘latifundio’. The decrease in the number of latifundio may be achieved through a land reform that tends to improve the property' rights system (increase in the number of titles, decrease in transaction costs, increase in investment on land, decrease in tenure insecurity). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 13 Inserted in the world as an export economy. In turn, the latifundio was functional for the export economy during all the major cycles (sugar, rubber, gold and coffee) that Brazil experienced. In this view, there are opposing classes: large landowners and landless peasants. Cleary, the slave-based system contributed to the widespread use of the latifundio, as the dominant agrarian type of export production. The roots of this type of agrarian organization did not change with the abolition of slaves. In other words, for Prado, the transition to a free labor economy happened without any appreciable change in the size of landholdings. The coffee period did not bring any positive changes for the Brazilian economy. On the contrary, It reaffirmed the monopoly power of the landowners that in turn translated into their domination over the labor market. Coffee producers ‘exploited’ the immigrants in a 'way that bore close resemblance to how they did so in the slave economy. Thus, the latifundio survived during the coffee economy mainly because there was little room for the creation of small and medium sized landholdings. Influenced by Marxist ideas, Caio Prado argues that the concentration of land in Brazil is a widespread problem that hampered Brazil’s industrialization. Celso Furtado’s analysis Is contained in his classic ‘Economic Growth of Brazil’. A question Implicit in his analysis is: What explains the different development patterns between the United States and Brazil? Given that both countries started with similar Initial conditions, why had the U.S. by the first decades of the 20th century already taken off while Brazil remained stagnant? In brief, for Furtado, England R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 14 fostered the development of the United States and hampered the process in Brazil. The author explains that the northern colonies did not succeed in developing the conditions for an export-based system, like the southern ones. In turn, England stimulated in the American provinces of the north the manufactures that were absent in the mother country to reduce the British import level.1 1 The author emphasized the positive interlinkages between the industries in the north and the agriculture of the South as well as the US insertion in the European economies. For Furtado, while England contributed positively to industrialization of the US, it hampered that in Brazil during the 19th century. This was because England imposed protectionist trade barriers against Brazilian export crops (especially sugar and cotton) in order to favor production of these crops in the British colonies of North America and the Antilles. While the United States increased its import tariffs to stimulate the domestic industries, Brazil could not do the same because of the 1810 commercial treaty that granted England a monopoly in the Brazilian market for almost fifty years. In addition to the different roles that England played between the U.S. and Brazil, Furtado also saw a difference in the political elites of the two countries. The development of smallholders in the northern colonies induced political competition among the landowners. Had the plantations from the south been adopted in the North, political competition would have been absent and probably US history would 1 1 Furtado explains that while England started these protectionist tariffs in the US in 1699. the United States preserved this policy after the independence. Indeed, in 1808, the import tariffs for cotton fabrics reached 17.5% (p. 100). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 15 not have differed so much from Brazil’s. In a slave-based society, coffee provided an opportunity for the late industrialization of Brazil. Indeed, for Brazil, coffee was more than another ‘cycle’. Coffee satisfied the last preconditions for Brazilian industrialization. Furtado carefully provides an analysis of the linkages that were produced during the coffee period, with special attention to the expansion of the domestic market. It is clear that coffee was a required phase for industrial development. Different from Simonsen (1945) whose argument was later supported by Neto (1959), who saw the coffee period as one that even further delayed the industrialization of Brazil, Furtado explains that without coffee Brazil would not have developed the linkages to adopt import-substituting industrialization. These authors contributed to a better understanding of why backward countries could not replicate the conditions found in the developed world and what had to be done for the whole world to be ‘rich’. Whether or not their analysis proved correct is not our concern here. The role of immigrants and slaves, the peaceful transition to a free society, the concentration of landholdings, the coffee economy in fostering industrialization, are important aspects of these works. The political tone, present in all these works, is excessive in Caio Prado. To make his argument more ‘general’ Caio Prado argued that the Paulista coffee producers replicated the duality (landowners versus landless peasants) so as to conclude that coffee was produced in latifundios during the entire period from 1830 to 1930. According to Caio Prado, coffee producers were hegemonic in both the state and federal government. In is only R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 16 after 1930 (with the bankruptcies arising during the post-1929 depression and the lost of hegemony) that coffee producers started to parcel out their properties. In particular, for Brazilian scholars, the term ‘latifundio’ has a special connotation that is stronger than ‘large land holdings’ or even ‘plantation’. In brief, the concentration of landownership in Brazil is characterized by the presence of idle land, known as latifundio. In turn, according to Alston, Mueller and Libecap (1999): Throughout much of its history, Brazil has had a highly concentrated ownership structure characterized by large, often unproductive properties known as latifendio. (...) Owners of latifundio have been politically powerful, and they have successfully resisted the expropriation of tlieir lands. As a result, the tension between the efficiency gains from secure property rights to land and the distributional goals from land reform have been long standing. (...). The resulting coexistence o f large idle farms and large numbers o f landless peasants has made land redistribution or reform a major issue in Brazil since 1960s. (p. 32) In Brazil there seems to be a relationship between the existence of latifundio and the lack of clearly defined rights on the land.1 2 The widespread presence of latifundio in Brazil reflected the concentration of land and wealth. These large tracts of land, according to Prado Junior (1966, 1979), were part of a colonial heritage and reinforced by the 1850 land law. For Prado Junior (1966, 1979) the Land laws created by the different states during the Old Republic in Brazil did not affect the concentration of land and thus preserved the ‘latifundio’ type of system. As we argue later in this work, the size of land holdings changed in Sao Paulo during the Old 1 2 Deininger andBinswanger (2001) explain that land reforms are justifiable on distributional, efficiency and equitable grounds. According to the authors, secure property rights are the basis for growth and development. In Brazil, the latiftmdios are widespread and the poor do not have access to land. Land reform in Brazil implies a decrease in the number of latifundios, by enticing squatters with a set o f secure land rights. In other words, in Brazil, land reform implies a decrease in the size of the properties achieved through an improvement in the property rights system. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 17 Republic. Different from what claimed by Prado, coffee was not entirely produced in ‘latifundio3 and hence, the concentration of land in Sao Paulo decreased during the Old Republic. Alston, Mueller and Libecap (1999) explain that a land reform would have positive distributional impacts but also would indirectly improve the efficience gains that emerge from a well-defined system of property rights. According to the authors, having a title on land decreases the owners’ uncertainty, leading to an increase in investment on land. A well-defined system of land rights also tends to improve the provision of credit and tend to create a market for sale and leasing land. Likewise, access to land, that was left idle, should have a positive impact in output. In other words, a land reform would eliminate the ‘latifundio’ type of holdings and in turn, tends to give owners more secure property rights on land, which in turn, tend to improve the system of land rights, as a whole. 1 3 The unequal distribution of land in Brazil led scholars to advocate a reform in the private property rights on land, as a synonym for land reform.1 4 Private property rights are not well defined in Brazil not only because of high administrative costs or because of lack of clarity in the 1 3 In Brazil, the concentration of land, given by the presence of latifundios, had a negative impact on the property rights system. In other words, large and idle land holdings tend to block the access to land to the majority of the population. The landless group, in turn, tend to squat on the idle land. However, because land is a political asset, land titling is not accessible to the majority of the population. A well-defined land rights system, would entice squatters with a title on the land, and hence would follow the procedures dictated by the law'. In this dissertation we argue that the size of the rural properties decreased in Sao Paulo, during the Old Republic, through an improvement in the system of land rights {mainly through an enforcement of the law). 1 4 Michael R. Carter and Ramon Salgado. (2001). “Land Market Liberalization and the Agrarian Question in Latin America” In: De Janviy, A ., Gordillo, G ., Platteau, I. and Sadoulet E. (eds). Access to Land, Rural Poverty and Public Action. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 18 contents of the law. The key is that landowners tend to be ‘above the law’ and hence, the legal rights of squatters are rarely .respected. A well-defined system of property rights would give squatters titles on the land. A title, in turn, reduce uncertainty of ownership because squatters are no longer subject to eviction threats and are protected by the civil code. While the relationship between well defined land rights and size of the land holdings is not a general proposition, it was valid for Brazil. During the Old Republic, land was a source of power and latifundio was widespread in different states of Brazil. The procedures required to obtain titles on land (creation o f land registrars, documents to prove previous use rights, measurement commission) were not followed because the owners of latifundio usually did not enforce the laws. In particular, in Sao Paulo coffee region, the focus the object of this study, we argue that the need to attract immigrants led to a structural change in the land tenure structure towards a well defined system of land rights (secure titles, easy access to land registrars, reduced number of documents to prove ownership, enforcement of the laws). In turn, this process led to positive externalities in the whole land market such that the ‘latifundio’ type of property became less and less frequently observed. 2.1.2 The Regional Studies Coffee production in Rio de Janeiro had its golden days between 1830 and 1870 in the municipalities Vassouras, Resende and Saquarema. The regional studies on R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 19 coffee in Brazil were initiated by Stein (1957) with his ‘Vassouras5 story. According to Stein, coffee was produced in latifundios by slaves. Indeed, Vassouras was the region of greatest concentration of land grants, explaining the origin of the extremely large size of landholdings in the area. Stein carefully explains the role of “factors” In the provision of credit and as the planters’ middlemen in Rio de Janeiro. Factors advanced planters credit in exchange for the .future delivery of coffee. This credit was facilitated by the use of slaves as collateral, especially because slaves were estimated to account for 70% of the plantations’ wealth (p. 225-226). The Imperial government devoted special attention, to Vassouras and even extended the D. Pedro II railroad into this coffee region. In Vassouras, slaves were more valuable than coffee. Hence, the majority of the coffee producers from this region went bankrupt when slavery was completely abolished In 1888. While Stein’s contribution is one of the best in this genre, we should mention the interesting work by Whately1 5 for coffee in Resende, another leading coffee region in Rio de Janeiro. Whereas Stein mled out any possibility of medium size farms, Whately explained that coffee farms were more evenly spread among large, medium and small ones.1 6 Resende did not have as many slaves as Vassouras and in fact, the planters from that region were not as powerful as the ones from Vassouras (politicians and senators from the Empire). Before the complete termination of slavery, some coffee producers, notably the Pereira Barreto family, moved to the 1 5 Maria Celim Whately (1987). O Cafe em Resende. Rio de Janeiro: Jose Olimpio Editora. 1 6 Both authors, Stein and Whately, studied the same period: 1850-1900. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 20 new coffee lands in the western part of Sao Paulo. In fact, the Pereira Barreto group settled down in Ribeirao Preto in the 1880s to introduce a high quality brand of coffee - the bourbon - that was subsequently adopted by other farmers in the hinterlands of western Sao Paulo. While it seems that the latifundio was the dominant type of property, at least in Rio de Janeiro, during the Empire (1822-1889), and in its continuation in the hilly areas of the Paraiba Valley (north of Sao Paulo), other, more recent regional studies have not confirmed the long duration of this pattern. For example, Marcondes (1998a, 1998b), based on Ms work on the Lorena region in the Paraiba Valley, found that the latifundio did not hamper the development of small and medium size properties.1 7 In the absence of data on the size of lands, authors have used number of slaves as a proxy for the concentration of land and wealth. These regional studies use the wills of a population sample over a period of time to calculate, among other things, changes in the Gini coefficients of slave holdings. The greater the index, the greater is the concentration of slaves owners (and thus land). Marcondes (1998a) showed the Gini coefficient among Lorena coffee producers to have been very stable at about 0.56 between 1829 and 1879 and considerably lower than those reported in the same period in two other coffee producing regions of the Valley (Areias and Bananal). The author studied 200 wills to find that, while the coffee producers were 1 7 To some extent, oar work was inspired by Marcondes. The author also argued that Caio Prado and Celso Furtado were responsible for the ‘distorted’ (but dominant) view, that coffee was produced in latifundio throughout the whole period (1830-1930). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 21 mainly large landowners, we should not underestimate the contribution of small and medium landowners who represented 30% of his sample. Marcondes (1998b) compared two coffee regions: Taubate (in the Sao Paulo Paraiba Valley) and Angra dos Reis (in the coast of Rio de Janeiro).1 8 Marcondes found an original document from 1868 with the size distribution of the coffee farms1 9 showing Angra dos Reis to have a larger Gini index (0.648) than Sao Paulo (0.573) 2 0 This suggests that not only was Rio de Janeiro’s coffee production larger than Sao Paulo’s in 1868, but its inequality in landholdings and coffee production was greater. The largest coffee producer in Rio de Janeiro produced five times more than the largest one in Sao Paulo. The interesting aspect is the significant presence of small and medium coffee producers in the sample. Marcondes also studied the slave owners profile to conclude that there was an increase in the Gini index from 0.637 in 1872 to 0.657 in 1884. This work corroborates that his earlier finding for Lorena. In other words, the large landowners were not absolute as claimed by Caio Prado and Celso Furtado. The increase in land concentration (measured by the Gini coefficient) during the Empire did not totally exclude the presence of small and medium landowners in the coffee economy with a small number of slaves in their coffee farms. Another relevant study 1 8 The data on Angra is not as conclusive as the one for Taubate because Angra was not a relevant coffee region in Rio. However, given the absence of data for other regions, the author chose to report the results he found for this region in Rio de Janeiro. 1 9 In this case, the sizes are divided according to the coffee output (up to 999 arrobas; between 1,000 arrobas and 4,999 arrobas) and so forth. One arroba is equal to 14.4 kilos or 31.7 pounds. According to Binswanger and Deininger (1997):” The Gini coefficient measures the degree of inequality in a distribution. A Gini coefficient of zero implies a perfectly equal distribution whereas a cofficient of one implies perfect unequal distribution, with one unit holding everything and all others holding nothing.” (p. 1963). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 22 on the same theme was done by Zelia Cardoso de Meilo (1985). In this case, the author studied wills in the municipality of Sao Paulo between 1845 and 1880. Similar to Marcondes, she reported an increase in the Gini index (from 0.671 in 1845 to 0.880 in 1880), but again noticed the presence of landowners with a small number of slaves that were able to survive In the coffee economy. The main merit of these studies is to show that dominance of the latifundio did not totally exclude the presence of small and medium coffee farmers during the Empire. Finally, Warren Dean’s (1976a) work on Rio Claro is an important contribution for this genre. Like Stein, the author provided a set of primary data, Including notary records and the accounts of several plantations and newspapers. Though Dean had set out to study the century betweenl82Q and 1920, Ms emphasis Is more on years prior to the abolition of slavery and the transition to free labor. Dean sees the landowners as ‘exploitative’ of the labor force, both slaves and Immigrants. Because planters exploited the workers, using violence and other coercive methods, Dean explained the 1905 increase in foreign landownership as an exogenous movement. In other words, airal land in Rio Claro, according to the author, was not acquired by ‘colonos’ but by the spontaneous immigrants that lived In the urban zones. While Vassouras and Rio Claro were regions where we found the dominance of the latifundio, Resende, Lorena, Sao Paulo, Taubate and Angra dos Reis were counter examples, suggesting that small and medium size farmers were not excluded from the coffee production during the Empire period. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 23 2.1.3 Politics, Politicians Daring the Coffee Period In this section, we provide a brief summary of the political structures of both the Empire and the Republic, emphasizing the contributions of Faoro (1959), Carvalho (1988) and Carone (1978). Unlike the thirteen colonies in British North America, but like colonial Spanish America, Brazil served no significant apprenticeship in representative self- government under Portuguese colonial rule. For three centuries, Brazil was governed by Crown- appointed govemors-general (or viceroys), captains-general (or governors), high-court judges, magistrates, and other lesser bureaucrats. According to Faoro (1959), the independence of Brazil in 1822 can be regarded as part of the so-called democratic revolution of the Atlantic world in the late eighteenth and early nineteenth centuries in the sense that liberal democratic ideas were widely proclaimed in the struggle against Portuguese colonialism and absolutism. There was, however, never any intention of establishing in Brazil, a society looking even remotely like a liberal, representative democracy. Unlike the newly independent Spanish American states, Brazil did not even become a republic, but an Empire. Carvalho (1988) explained that the ideological homogeneity of the political elite, brought from Portugal and mainly composed by magistrates, gave Ideological as well as social homogeneity to support the political stability of the new regime. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 24 Carvalho rejects Faoro’s idea that the elite represented the power of the landowners, and the State was simply following the interests of this class. He says that, because the State depended on agricultural exports (especially in terms of taxes), the landowners’ interests were important in political decisions. The ability to deal with conflicts without threatening the constitutional order was a key goal of the regime. Faoro (1959) and Carvalho (1988) explain that under the political system of the empire, power was concentrated in the hands of the hereditary emperor himself, his chosen ministers, the counselors of state he appointed (for life), the provincial presidents he also appointed, and a Senate (appointed for life by the emperor). The Empire had an elected Chamber but voting in elections was open and oral, vulnerable to fraud and patronage by local landowners. The centralization of power during this period shows the weak capacity of civil society to have political representation. Carvalho explains that the success of the Empire, in terms of political organization, was related to the common ideological background of its political elite. In other words, the magistrates came to Brazil to build a state and they all had a common educational background, which facilitated the creation of a national identity. While the political and administrative structure of the Empire was highly centralized around the Emperor, the Old Republic was a decentralized system that granted the states autonomy to legislate their own land, labor and credit policies. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 25 According to Carone (1978), democratic regimes brought ‘universal suffrage’ (except for the illiterate and immigrants) in elections for the executive (president and state governors), Senate, Chambers of Deputies and State Assemblies. The direct elections, however, did not preclude an immense amount of electoral fraud. The reason why elections were fraudulent during the Old Republic had to do with the distribution of power among the three leading states, Rio de Janeiro, Minas Gerais and Sao Paulo, known as ‘governors politics’(politica dos govemadores). During the Old Republic, elections were contested but only by state parties, and in each state the Republican Party was dominant. The outcome of the presidential elections was predetermined by agreements between state governors, known as ‘governors’ politics’21. No "official” candidate backed by the governors and Republican political machines of at least one and usually both of the two states with the largest electorates (Sao Paulo and Minas Gerais) and two or three of the largest second-rank states (Rio Grande do Sul, Rio de Janeiro, Bahia, and Pernambuco) ever lost, and no "opposition" candidate ever won a presidential election. In brief, the ‘politica dos govemadores’ implied that the governors appointed the president of Brazil, who in turn, was confirmed by an electoral process. The base of support for this system was at the level of the ‘municipio’. In particular, the greater the number of districts (electoral zones) that the governors 2 1 This practice was alas known as the ‘coffee and milk politics’ (‘politica do cafe com leite) in a reference to the presidents coming from Sao Paulo (the coffee region) and the ones who came from Minas (the ‘milk’ state). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 26 dominated, the greater was the governor’s control over the Republican Party. Each district (electoral zone) had a member of the party in charge. This member, usually a ‘coroneT, granted Ms support for the Party in exchange for an increase in the budget for his region and the ability to nominate judges for his region, among other benefits. For the Republican Party, the coronals’ support meant that the candidate chosen by the governor had foil support of all members of the Republican party (the coronels’ electorate). “Coronelism” was an important, informal power source present, to varying degree, in all Brazilian states until 1932/2 WMle in the northeast it achieved its extreme form (‘cangaco’, where rival families killed each other in their power struggles), it was also very much present in the more developed regions during the Old Republic. While coffee producers from Rio de Janeiro dominated the political scene during the Empire, Paulistas were much in evidence, especially on a state level, in the Republic they had helped to create. All these authors agreed that Brazil was not a Banana republic. In different degrees, they reject the simplistic idea that coffee producers dominated the central government during the Empire and even during the Republic. 2 2 According to .Rosas (1987), the 1932 electoral legislation introduced the secret ballot to reduce (tie chances of purchasing the votes. According to Bethel (2000) elections in Brazil until 1989 were always fraudulent, suggesting that the coronelism ' was probably present in s\om e states. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 2.1.4 The Thematic Studies 2.1.4.1 The Credit and Money Markets There are many excellent studies on this subject. The credit market, during the Empire was explored by Sweigart (1980) for the Rio coffee market. The author provided a detailed description of how factors worked as the farmers’ middlemen and bankers in Rio de Janeiro. In his story, coffee production went down in Rio during the 1880s because the Imperial government did not subsidize the creation of mortgage banks at a time when slavery was being abolished. In Rio de Janeiro, according to Gorenstein (1980) the greatest fortunes were not in the hands of coffee producers but rather in those of the merchants involved (until 1850) in the slave trade. The most interesting aspect of her work is that these companies had Portuguese ‘head’ owners but were in fact owned by the British. The author found more than 50 companies that wired funds obtained through slave traffic to former British businessmen that lived in Brazil.2 3 When Brazil succumbed to the English pressures and finally prohibited the transatlantic slave commerce, the Bahian merchants threatened a rebellion against the monarchy while the Rio ones remained silent. The reason for such divergence, according to Gorenstein, was their different sources of capital: Brazilian and Portuguese in Bahia, and British in Rio. On the role of commercial banks in fostering coffee and even industrial activities, we discuss three important studies. The first, by Flavio Saes (1986), covers the 2 3 By law, British citizens were prohibited to engage themselves directly in slave traffic. The law, in turn, allowed that British provided insurance for the slave trips {because, in theory, the insurance was protecting the stops not the slaves). The companies discussed in Goreinstein (1980) executed slave commerce (trips between the coasts of Brazil and Africa). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 28 period from 1850 through 1930 in Sao Paulo. His work examines the history of banking and monetary policy in Sao Paulo to show that it reflected the tensions of an economy in transition from agriculture to industry. Inspired by Sacs’ work, Hanley (1995) argued that Sao Paulo was able to develop from a primary product - export economy at the end of the nineteenth century/ into a major industrial center in the twentieth century thanks to the early and broad development of formal financial intermediaries which promoted faster and more efficient mobilization of capital for investment2 4 Trinner (1994) provides a very interesting analysis of the role of the commercial banks and the Brazilian financial system between 1906 and 1930 in fostering industrialization. Briefly, she successfully demonstrated that the banking system was dynamically responsive to the Brazilian economy, growing faster than output, population and the money supply. Trinner then draws a parallel between commercial agriculture in the US South and that in the Paulista coffee economy. In both places - Sao Paulo (BR) and Louisiana (US), a dynamic banking system was developed to support agriculture rather than industry. The recent historiography on monetary theory has questioned the presumption of a weak federal government that closely followed the interests of the coffee producers. These new lines of research suggest that monetary', financial and industrial policies were often dictated by the federal government’s immediate financial needs (to accommodate debt service and new infrastructure investment 2 4 Her work covered (be 1850-1905 period. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 29 obligations). For Fritsch (1988), the Federal financial policies were often determined by the need to meet international debt payments and the coffee producers’ interests were often sacrificed to this goal. He argues that the needs of foreign capital dictated the federal government’s national economic policy. The resulting support, at times, for the agricultural export sector in the form of foreign exchange and coffee valorization policies was a consequence, not a determinant, of these policies. Topik (1987) addresses the role of the financial sector in the political economy from the perspective of government institutions. He has found that, despite liberal presumptions, the national government pursued interventionist policies in many economic sectors, including finance. 2.1.4.2 The Industrialization During the Coffee Period While Baer (1965) does not agree that Industrialization was entrenched in the Brazilian economy prior to 1930, Topik (1987) argues exactly the opposite. The author carefully compiled evidence showing that prior to 1930 the Brazilian state granted subsidies and capital for investment in infrastructure (railroads, ports, housing, electrification) that, combined with the incentives provided by the state of Sao Paulo, induced considerable industrialization prior to 1930. As early as 1850, industrialization in Brazil was first fuelled by Ireneu Evangelista de Souza, known as Baron ofMaua.2 5 He acquired his fortune2 6 through ~ 5 The infonoation here was taken from two sources: Maua (1878). “Exposicao aos Credores” and Caldeira (1995). “Mam: Empresario do Impede”. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 30 a long-lived partnership with Carruthers, the second most important British exporter. Maua, however, went beyond this to find British partners to finance “The Sao Paulo (Brazilian) Railway”, the railroad linking Santos and Jundiai (known as ‘the English railroad’). Highly influenced by British ideas of industrial revolution, he wanted to create the conditions to pave the way for the industrialization of Brazil. In the railroad sector, Maua built the D. Pedro II railroad, in Rio de Janeiro, but was forced to grant it to the Imperial government. Later, however, he had the concession for the Recife-Sao Francisco railroad. In the Amazon, he had a navigation company based in Manaus that transported the goods around the northern provinces. His commercial banks (Banco Maua) were located in almost every province of the Empire and were later established in Argentina. He founded and owned the gas, sewage, and lighting companies in Rio de Janeiro. The businesses created by Maua relied on state financing. Maua opposed the continuation of slavery and was trying to create a domestic market to fuel industrialization. That market, however, came later, especially in Sao Paulo after the 1880s. All Maua’s businesses were confiscated by the Brazilian government and in 1878 he declared bankruptcy. In his exposition to his creditors, he explained that the political opposition he faced in Brazil is what drove him down and as such was typical of an agriculture and slave-based society. It was only then that he understood (according to Maua) that Brazil was not ready to 2 6 According to Caldeim (1995, p. 32) M am ’s private fortune {in assets) was comparable to the assets owned by the Bank of England or by the largest American bequest left in tire 19th century by Comelious Vanderbilt, the railroad king. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 31 take off and to engage in an industrial revolution. Brazil had to create a domestic market, strong enough to demand the production of goods. 2.1.5 Theories of Development of Private Property Rights in Land The evolutionary theory of land rights is possibly one of the most widely adopted view to explain how and why property rights in land were first created in the different periods of history in distinct countries. The basic contention of the evolutionary view is that as land scarcity increases, people demand more land tenure security. As a result, private property rights in land tend to emerge and, once establish tend to evolve towards greater measures of individualization and formalization. A common trigger for the development of land rights is often associated with the rise of the relative price of a land intensive product. In turn, a spontaneous demand for formal land rights emerges stimulating an expansion of its supply (typically for export) and growing scarcity of land. The high scarcity value of land, in turn, raises the incentives to create property rights to capture the rents that otherwise would be dissipated2 7 Numerous applications of this model have been suggested.2 8 The perfect illustration of the evolutionary version is provided by Feeny (1988) in Ms study of Thailand. Feeny argued that the appreciation of agricultural terms of trade, during the 19th century, was a good proxy for the increase in the price of land. Land values rose and with the termination of ‘property rights on men’, land disputes 2 7 This approach is expounded by: Demsetz (1967); North (1981) and Libecap (1978). 2 8 Refer to: Thomson etal. (1986), Feeny (1988), Federmd Feeny (1981). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 32 became endemic. This, in turn, induced the Thai government to respond with a series of procedural and administrative reforms which culminated in the creation of a formal system, of land titling in 1901. In brief, its response to the increased benefits of defining private property rights in land and to the growing need to resolve and reduce the incidence of land disputes through a centralized legal mechanism that the government started to create what was to become the current system of land rights in Thailand. In this scenario, all the parties involved benefited from the titling process. Looked at in this way, the task of the government appears essentially non- problematic. It only consists of supporting a change that is desired by everyone. The supply/demand mechanism behind the evolutionary theory is explicitly grounded in the market analogy. There is some sort o f ‘political market’, where demand for institutional change (land titling) is expressed and the supply responds when either land becomes scarce or conflict over land increase. The main problem with the evolutionary theory is that the state is implicitly posited as unique and coherent decision maker that carries out the ‘will of the people’. On the demand side those who oppose the change are minority and if the change indeed happens it means that the opposition was defeated and a smooth process towards a better system, of property rights is achieved. Population pressures also leads to an improvement in property rights on land. However, this pressure is perceived as a ‘demand for change’ only when land becomes scarce or when the prices of the goods produced by land increase. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 33 The emergence of private property rights entails at least three types of benefits. First, by protecting the user’s future claim on the land, the possessor of the land is induced to invest more on the land. Second, the rights to rent or sell facilitate the development of market for land such that competitive pressures can usually be counted on to contribute to its more efficient use. Third, the existence of titles to such property can be used as a mortgage, thereby facilitating the development or the access to a formal credit market. The costs of creating property rights in land, however, can be quite high. In countries like Brazil, where there is a great number of latifundios, private property rights are not enforced. Though the administrative costs to obtain title on land are high, the issue that tends to hamper land registration is the fact that large landowners tend to block any proposal of land rights and land reforms. In this scenario, the costs of having a title on land are mostly political because the political elite does not enforce the laws. In recent years, we observed a broadening of the model to include various transaction cost elements, such as the nature and strength of pre-existing informal arrangement in the joint use of common property or public lands. For example, de Soto (2000) has argued that property rights will be more efficient and equitably distributed when the system of formal land rights is congruent with or builds upon pre-existing informal land rights allocations. He blames the poorly developed property rights systems and the extreme inequality in the distribution of those rights R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 34 in Latin America and other less developed countries on the fact that formal legal systems have done just the opposite, deliberately rejecting the legality of the pre existing informal rales. While the evolutionary theories of property rights focus on how to achieve the ‘ideal’ type of property rights, Bates (1990) and Fermin-Sellers (1996) go still farther in arguing that the political foundations for such theory need to be given greater attention. Weimer (1997) argues that if key agents value heavily personal political power over economic or social gain, they may defeat rale changes that may be socially beneficial. Ensminger (1992) and Joireman (2001) provide interesting case studies of how the state or individual political leaders have manipulated such systems to introduce changes that serve their own interests even if they are not in the interest of a majority in the community. These political theories of property rights, therefore, have the effect of farther severing the notion of their natural, endogenous development as suggested by the evolutionary theory of property rights. Yet, the political influences need not be autonomous but could be still another endogenous influence of the rising scarcity value of land. Deininger and Feder (1998) explain that, as land gets scarcer, it is likely to lead to increasing social tension and conflicts with neighboring tribes or communities. In such situations, the rule of might is likely to play an important role and, unless constrained by democratic or egalitarian institutions and norms, the mighty may expropriate large blocks of land for their own use, thereby creating private very unequally distributed R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 35 property rights. Colonial powers may have an incentive to allocate these rights disproportionately to citizens of their home country so as to strengthen colonial presence in the colony. 2.2 The ‘Distorted Consensus’ on Coffee: the Land Market While the literature on the role of banking and finance during the coffee period has made significant progress lately, the same has not been true of studies dealing with the land market. There are two points of consensus in studies of the land market: (1) the failure of the 1850 land law in regulating private property rights and (2) that coffee was produced in latifundio type properties until 1930. 2.2.1 The Land Laws Brazil did not have any formal land legislation until 1822, when the system of alienating public land (‘sesmaria law’) was suspended. According to Guimaraes (1968, p. 112-114) and Dean (1971), in the absence of a formal land policy, squatting on land prevailed and so did violent disputes over land. Hence, as explained by Smith (1972): It was an attempt to put an end to this (squatting on public land) that the emperor promulgated the law of September 18, 1850, which prohibited the acquisition of lands by any means except purchase and threatened removal, loss of benefits, fines, and jail time to those, who, in the future, illegally occupied public lands, (p. 268) Recent research by Mueller (1995) connected the above view - that the law was created to evict squatters - to the increase in coffee prices. In other words, the economic importance of coffee (as the leading export crop in 1850) increased the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 36 value of lands. In turn, the costs of evicting squatters in these lands increased. In the absence of secure property rights, the benefits of eviction were lower than the costs. Coffee producers then demanded the creation of a new institution, a new land law that was supplied by the government through its enactment of that law. As explained by Alston, Libecap & Mueller (1999): Higher land values also created a demand for a change in institutional arrangement concerning property rights in order to alter the private costs and benefits o f owning land. As a result of the political pressure to clarify property rights as the competition for control increased, the Land Law was passed. (...) Enactment of the law reflected the political influence of landed elites and their desire to limit infringement on their holdings by squatters. (Alston, Libecap & Mueller, p.35). For these authors, landowners were demanding a new land policy, as if the previous one had been ever followed. The success of the law was conditional on the enforcement of private property rights. According to this view, the purpose of the law was to regulate the access to land and to a certain extent to allow squatters to receive titles to their land.2 9 According to these authors, the law failed to create property rights because the government did not have enough land registries in the provinces (Dean, 1971, p. 621) or even because the government did not punish the squatters who continued to illegally settle on public land (Holloway, 1980, p. 113). Another argument is that the 2 9 These authors, and even Emilia Viotti (p. 55-61), distinguished between squatters and sesmeiros. While the former represented the supposed class of small landowners the ‘sesmeiros’ were the large plantation owners. The squatters however, were not the small landowners. Indeed, according to Bernardo P. de Vasconcelos, a key figure of the Empire, the provinces o f Mato Grosso, Sao Paulo, Santa Catarina, Minas and Rio Grande do Sul were mainly composed by squatters that had large landholdings. (Anais do Camara dos Deputados do Brazil, 1843, p. 432-467). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 37 law imposed high costs on those small landowners who wanted to receive titles to their land (Dean, 1976a). The connection between the land law and immigration is imprecise in this literature. To different degrees, the authors agreed that certain clauses in the land law attempted to attract immigrants to Brazil. However, according to the authors, the imperial government imposed such a high price on the sale of public land as to preclude immigrants from becoming landowners upon arrival in Brazil.3 0 Due to the high price of public land, the absence of a colonization policy and the lack of funding for immigration, immigrants did not come to Brazil until the 1880s. As explained by Stocke (1986): In 1850, the approval o f the Land Law unified the rights o f private property and intended to prevent the immigrants from becom ing landowners, by im posing a high price on the sale o f public land. In turn, few im m igrants came to Brazil. (Stocke, 1986, p. 23). In Holloway’s (1980) words: “The law was a nearly unmitigated failure”(p. 115). Indeed, if the law intended to create property rights and failed and if the same law intended to attract immigrants without any success, then: “the law of September 18 was only partially executed, and in its major purposes it was completely frustrated.” (Dean, 1971, p. 621). In other words, the above views suggest the following conclusions. First, the law was trying to regulate property rights, due either to the absence of a land policy or to 3 0 Authors like Hall (1968), Martins (1973), and Dean (1976a), (1976b) portrait a situation where immigrants were nave in chosing to come to Brazil, instead of Argentina, United Stales. Canada or even Australia. Then, after arm ing in Brazil immigrants realized they would have to work as ‘indenture servants’ before being able to buy a piece of land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 38 the increase in land conflicts. Second, the law was also trying to attract immigrants. For some reason, the effects of the law contradicted its main intention (attraction of immigrants) mainly because, according to the authors, the price of public land was so high that immigrants could not buy it upon their arrival in Brazil. Third, there was no significant change in the flow of immigrants coming to Brazil after 1850. The marginal increase in immigration after 1850 was attributable to deteriorating economic conditions in Europe that drove immigrants to Brazil (even though they knew the would be ‘exploited’ there). Fourth, it is only in 1880 that Sao Paulo established the basis for an immigration policy. These four aspects are the critical parts of what we call later in this dissertation the ‘distorted consensus’. When Brazil was proclaimed a republic, jurisdiction over land was granted to each individual state, with the Union retaining the control on the borders of the territories and the national security zones (where the 1850 land law remained in effect until 1964). About land policies of the individual state, the literature has not had much to say. Mueller (1995) is. among the few7 that managed to say anything: W ith each state in charge o f its own land policy there was very' little federal intervention in land matter until 1963. Each state adopted its ow n legislation, yet there w as no radical deviation from the basic principles o f the Land Law o f 1850. By this point the basic pattern o f land tenancy in Brazil had been defined.(Muel!er, 1995, p. 67) Mueller was primarily concerned with the impacts of the 1850 land law on the Amazon and hence may be excused for not investigating further. The same cannot be said of studies like that of Holloway (1980) whose main concern was with what happened to the immigrants that came to Sao Paulo (between 1880-1930). While R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 39 Holloway is a little more precise, (to recognize the existence of the 1895 and 1921 Sao Paulo land laws), he also concluded that the Sao Paulo land laws were also failures. Interestingly enough, all these authors quote Dean (1971, 1976) as a reference. This author, in turn, explains: In Sao Paulo (during the Old Republic) nothing changed. As m easured by the degree o f concentration, certainly, the Republic has not changed landholding at all (Dean, 1971,p. 624- 625). In other words, the 1850 land law was ineffective in granting titles on land. The concentration of land started in 1850 and did not change during the entire Old Republic. The concentration of landholdings in Sao Paulo was explored by Caio Prado Junior (1979), Verena Stocke (1986) and Dean (1976a). Caio Prado argues that the landowners had no incentive to divide their coffee lands. He identifies a conflict of interests between immigrants and coffee producers. Despite evidence to the contrary (the 1920 and 1930s agricultural censuses), Prado continued to argue that not only was the latifundio the dominant type of landholding in general but also that it was dominant in the coffee farms of Sao Paulo. Almost half a century later we found a similar argument in Verena Stocke (1986). Stocke claimed that there was no general pattern of decrease in the size of landholdings even after the 1929 depression bankrupted some large planters. At most, what happened after 1929 was possibly a slight decrease in land concentration in the Paraiba valley, but not in the new areas of the West. The 1929 crisis impacted the old coffee zones because of the low R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 40 productivity of its coffee trees. For Stocke, even after 1929, there was no ‘general’ trend on the ‘democratic’ impacts of the 1929 crisis towards a decrease in the size of coffee landholdings. Dean (1976a), based on his research in Rio Claro, also denies that there were changes in the size distribution of landholdings. Although his analysis stopped in 1920, it is hardly possible that he would not have changed his opinion as a result of the 1930 census. The fifth aspect of the ‘distorted consensus’ is the alleged absence of change in the size of the landholdings prior to 1930, the latifundio remaining dominant until at least 1930. 2.3 The Aspects of the ‘Distorted Consensus’ in the Labor M arket Michael Hall (1969) examined immigration policy promoted by Sao Paulo, between 1871 and 1914 to conclude: The story of the first generation of Italian immigrants to Sao Paulo is an almost unrelieved tale of exploitation and bitter disappointment, (p. 116) Hall argued that coffee producers used violence against the immigrants who complained that their wages were delayed. However, even with all these problems, immigrants continued coming to Sao Paulo: The fall in wheat prices was accompanied by a price decline in the silk industry, which was an important source of income in Venetia. Eventually both laborers and tenant- farm ers were led to see in mass departure for South A m erica the only means of saving themselves from total ruin they feel condemn, (p. 120-121) Hall emphatically (and ideologically) denied that immigrants became landowners. It is not only that they could not afford to, but he says (without any R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 41 documentation) that the immigrants that came to Brazil did not want to buy land. In the same line, we have the immigrants that were semi slaves in the Sao Carlos story by Truzzi (1986), indentured servants in Rio Claro according to Dean or ‘exploited labor force’, according to Martins (1973). Hence, the sixth aspect of our ‘distorted consensus’ is the denial by these authors that immigrants could have become landowners by 1905. The path-breaking study on immigration was provided by Holloway (1980). The author looks at the Sao Paulo immigration between 1880 and 1930 to demonstrate how' the composition of laridownership changed. Although he showed that more and more foreigners became landowners, he did not explain how they did so. While he recognized that some immigrants could afford to buy land, he did not see the state as doing anything to make this possible. We did not include Holloway in the group of the ‘distorted consensus’ because he provided a consistent analysis of the immigration process that is by ail means superior to the ones we named ‘distorted’. But, he did miss addressing an important question: Why and how did immigrants become landowners? For Holloway, the land and labor laws during the Old Republic played no role in fostering upward mobility of the ‘colon©’. In sum, the ‘distorted consensus’ has the following seven aspects: (l)the 1850 land law' was created to regulate property rights; (2) the 1850 land law failed to attract immigrants; (3) the small increase in immigration after 1850 is R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 42 due to the deteriorating conditions in Europe; (4) it is only in 1880 in Sao Paulo that the immigration initiative became a priority, with the imminent abolition of slaves; (5) between 1905 and 1930 there was no change in the size of rural properties and hence, coffee continued to be produced in latifundio type properties until 1930; (6) immigrants could not afford to purchase a rural land in 1905, 1920 or 1930 and (7) the land laws during the Old Republic in Sao Paulo did not induce any changes in the concentration of land nor stimulated an increase in land titles. It is clear that we disagree with the ‘distorted consensus’. In the following chapters we explain what indeed happened in Sao Paulo. We are not concerned with why the distorted consensus used these arguments. Instead, our purpose is to provide a more neutral, objective and comprehensive account of what indeed happened during this period and why. 2.4 The Laws According to the Lawyers and Legislators Between 1850 and 1889, the 1850 land law was amended eleven times. While these amendments are in the appendix, we chose to study the evolution and the application of the law, and thus we had to investigate whether or not the legislators introduced any amendments.3 1 Hence, for instance, Dean (1976a) claimed that the land law failed because the measurement costs were too high for 3 1 In Sao Paulo, however, during ike Old Republic, we did not find changes (amendments) to the 1895 and in the 1921 land laws. Between these two laws, we found immigration laws that were dependent on the land laws. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 43 the small landowners. Yet, in one of the amendments, (Aviso 4/10/1858) we found that the imperial government exempted ‘small’ landowners (squatters or sesmeiros claiming ownership of rural plots up to 121 hectares) from the measurement and registration costs. The interpretation of these amendments, sometimes, was not obvious. For example, the 1854 statute defined a whole set of procedures that granted legal power to enforce the 1850 land laws. The 108 articles divided in nine chapters, explaining, for example, the procedure for measuring public land for the purposes of colonization, the role of the provincial presidents in the measurement of private land, and numerous other practical issues for making the law effective. In this case, for example we used Cardozo (1954) to understand some aspects of the statute. Another aspect that we found in the 1854 statute was the possibility of granting public land to subsidized immigrants. The literature analyzed above concluded that the price of public land was too high, possibly because the 1843 proposal was included in many secondary sources. Yet, the 1850 land law and the 1854 statute were not included and what they said about such matters was very different. Our understanding of these laws benefited greatly from the interpretations provided by Osorio (1996) and Linhares (I960).3 2 These legal studies were extremely useful, both because of their rigor in interpreting the laws and because they provided a more neutral approach to these issues. 3 2 Cime Lima (1954) is mi excellent source for the period before 1850, bat not for the 1850 land law. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 44 We undertook field work in Rio de Janeiro and Sao Paulo to obtain these laws and the political motivations behind them. The question that later became our main objective was: if these land laws were so ineffective, why did immigrants come to Sao Paulo, instead of going to Argentina for example? The harder question to be answered was: How (through what process) did these immigrants become landowners? Do we have any grounds to exclude the urban immigrants from this process? In other words, can’t it be that the ‘colonos’ were poor workers and the urban ones became coffee producers? The material we use in the following chapters includes the Annals of the Parliament (for the 1843 proposal). During the Empire, the annual reports, from the Empire minister (until 1860) and then from Agriculture ministry (until 1889) had one major item Land and Colonization (‘Terras e Colonizacao’) where the authorities evaluated the whole immigration process, changed the yearly budget, announced contracts with new colonization companies, granted extra funds for the measurement of public land and so on. When necessary, we complemented these reports with the annual reports released from the provincial presidents (mainly from Sao Paulo, Minas and Rio). Whereas the Imperial government produced detailed reports, the provincial ones were not very uniform in what they provided. During the Republic, we used the laws from the state of Sao Paulo, and the interpretation of these laws for Minas Gerais. Through the annual presidential messages (annual reports from the governors), we were able to follow the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 45 application of the land and labor laws In Sao Paulo. In these documents, under the item ‘Land Services’ (“Service de terras”) we found the detailed description on the construction of settlements to receive immigrants, for example. The hardest part of this work was not to find the material but to explain the laws, why they were enacted and what were the Interests behind them. 2.5 Conclusions There has been a significant amount of progress in the regional and thematic studies. Mueller’s is the only contribution that connects the land policies implemented during the coffee period with the country’s development problems, although his focus was on the problem of deforestation in the Amazon. His path breaking contribution, however, is unique. His and other works that explained the violence and conflicts of titled land due to the disposition of the 1850 land law are also interesting. However, one should not generalize these analyses to conclude that the perceived failure of the 1850 land law was due to the alleged ‘inaction’ by the state of Sao Paulo in creating enforceable laws or that it resulted in continuing high concentration of land ownership in Brazil. A related goal of this dissertation is to emphasize that to understand the concentration of land in Brazil we have to study each state on a separate basis. Unfortunately, we cannot generalize to say that what was valid in Sao Paulo, during the Old Republic, was also valid for the second R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 46 largest coffee producing state, Minas Gerais. We hope to show that the land concentration in Sao Paulo decreased during the coffee period due to the enforcement of the labor and land laws. In fact, we know very little about the other states, and indeed, we are still unable to answer the question: What are the historical (or non-historical) reasons that led to such concentration of land in Brazil? Besides the frontier and national security zones, where it is possible to consider the negative impact of the 1850 land law on the procedure to acquire land, the current literature has little to add, mainly because there are few, if any, studies dealing with land laws and their impacts on landholding patterns. In reviewing the literature we found few studies that deal with both periods (Empire and Republic) as well with the three major markets (land, labor and credit) in a political economy framework. Though it would be probably easier to study one- theme in depth, we found it more interesting to study the impact of these legislations on all three markets and the interrelationships among them. This broader approached helped us to realize that the primary impacts of the land laws were to be found in the labor market. Then, during the Republic, the labor laws had major effects on the land market. Often dismissed by most of the literature, the Empire period is key to understanding the foundations of the coffee economy in Brazil. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 47 CHAPTER 3: THE DETERMINANTS OF THE 1850 LAND LAW DURING THE EMPIRE. PERIOD IN BRAZIL According to the authors discussed in chapter 2, the 1850 land law was created to regulate property rights. Hence, if the law did not succeed in creating a system of private property rights, it would be considered a failure. For some reason, land seemed to have become a national priority that led the State Council, the most powerful institution of the Empire, known as the ‘monarchy brain’, to formulate the 1843 proposal that in 1850 was incorporated into the 1850 Land and Colonization Law. This above view, however, is flawed. First, in a country where the ‘latifiindia’ was dominant, there is little reason to see why the political elites would profit from laws creating new property rights, since this would threaten their monopoly rents. In other words, it is not rational for the political elites that were represented in the government to lobby for a policy that would reduce their own welfare. Second, if the law was a failure it would imply that the increase in immigration that followed the 1850 land law must have been attributable to depressed conditions in Europe. The problem with this argument is that there was in fact fierce competition for immigrants among the various ‘new countries’ that induced each to create incentives to attract the largest possible number of immigrants. In other words, the ‘push’ factor given by depressed economic R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 48 conditions in. Europe was only a general determinant of migration, not an explanation for why the immigrants came to Brazil and not Argentina. The view expounded in this essay is that the gradual abolition of slavery and the peaceful transition towards a free-labor economy became possible due to the institutional devices introduced by the 1850 land law. Our story, based on. the Annals of the Parliament, departs from the traditional interpretation expounded in chapter 2, and views the law as a classic example of a rational and forward looking policy to attract immigrants to Brazil in order to avoid the shortage of labor when slavery would be completely abolished. To demonstrate that the 1850 land law was in fact a success, because its main goal was to attract immigrants and not to regulate land rights, we focus on the determinants of the 1850 land law. In the next section of this chapter (section 3.1) we review the determinants in the land market, the political conditions, the problems the country was facing in the labor market and the 1843 land and colonization proposal. The 1850 land and colonization law is summarized in section 3.2 and the 1854 statute is explained in section 3.3. A summary of our conclusions is then presented in section four. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 49 3.1 Determinants of the 1850 Land law 3.1.1 The Previous Conditions in The Land Market While the history of land policies implemented by Portugal since the discovery of Brazil until its independence has been exhaustively explored elsewhere3 3, some aspects of those policies deserve attention here. The basic institution for granting land, during the colonial period (1500-1821) in Brazil, was the- ‘sesmaria’. In brief, sesmarias were concessions by the Portuguese crown to an individual willing to use Brazilian land for productive purposes. In some cases, the Law of Sesmarias, required the payment of fees, and since 1753, the law required the previous measurement of the land in order to obtain a title. There were no restrictions on alienation of the land, the only requirement was that the land be used for productive purposes. According to the law, the size of these grants varied from 16,7 to 50.1 square miles. Each claimant was entitled to only one sesmaria. The frequent changes in the land legislation (the law of sesmarias) and the absence of an agency to monitor the grants created a situation where relatively few of the sesmarias had valid titles. Those who lacked the amount required to obtain a title to the sesmarias, or even those who got the concession but did not pay for the title could squat on unclaimed crown land and generally do just about as well. Public land, in theory, belonged to the Imperial government. However, the government did not 3 3 Refer to: Ray Cime Lima (1954), Pequena Historia Territorial do Brazil, Sesmarias e Terras Devolutas.: Brasil Bmdecchi, (1963) Origem do Latifundio no Brasil, ; Warren Dean (1971). Latiftmdia and Land Policy in Nineteenth Century Brazil, The Hispanic American Historical Review ; Ligia Osorio Silva. (1996) Terras Devolutas e Latifundios: Efeitos da Lei de 1850. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 50 where public land was located and its extension. Adverse possession3 4 was not recognized under the Portuguese law, but because it was seldom punished it became the most common procedure to acquire land in Brazil. During the 1843 debates, squatting was informally recognized as a legitimate way of acquiring land, upon satisfying the requirements of (1) productive use of the land and (2) claimants’ main residence (‘morada habitual e cultura efetiva’). In fact, during the debates, representatives from Sao Paulo and Minas Gerais explained that more than half of their provinces were ‘posses’ confirming that adverse possession was the dominant pattern of land acquisition. The distribution of the sesmarias was a political matter as well as an administrative function. When the Portuguese king, loao ¥1, lived in Rio de Janeiro, from 1808 to 1821, such grants were distributed to favorites of the court.3 5 By the time the king returned to Portugal in 1821, the number of land grants had more than tripled and the great majority of them were not up to code because they were neither measured nor confirmed. The independence of Brazil from Portugal in 1822 brought an abrupt suspension of the land grant regime. For a whole generation, no legal substitute for the sesmaria could be devised. The 1823 Constituent Assembly was dissolved by the first emperor of Brazil, Pedro the 3 4 According to Baker, M eek, Simians and Turnbull (2001, p. 360-361) adverse possession is a legal doctrine through which trespassers or squatters can acquire a title on land by occupying it for a statutorily set period of time. Squatters in Portuguese means ‘posseiro’ and adverse possession (legally speaking) means ‘posses’. 3 5 To solve the financial difficulties that the king and Ms court were facing during their stay in Brazil, the king started to grant noble titles and land to those willing to buy shares of the bank he founded, the Bank o f Brazil. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 51 1 st, who then bestowed his own constitution, on the country. Neither the Assembly’s draft nor Pedro’s version provided for alienation of public lands. For the new regime, this was a difficult and dangerous question. The authority of the Imperial government was precarious. The legislative power was exercised by a Chamber of Deputies dominated by a liberal opposition to the young and inexperienced crown. During the reign of Pedro I (1822-1831) and the regency3 6 that followed, the liberals in power granted political autonomy to the provinces that in turn led to numerous regional revolts. The 1822 independence from Portugal did not bring political stability to Brazil. In fact, it fostered a series of rebellions against the monarchy centralization3 7 that lasted until 1842. Indeed, political instability proved to be a major problem, and in comparison, the absence of a land policy3 8 was not affecting the major political players. 3.1.2 The Political Conditions 3.1.2.1 Relations with England English domination over Brazil goes back to the 1703 Methuen treaty, which forced Portugal to open its markets and give it a privileged position in Brazilian 3 6 In 1831, Pedro the 1st was forced to resign. He left his five year old son to be the second emperor of Brazil. During this period, the country was governed by a group o f politicians, in charge o f the prince upbringing, chosen by Pedro the Ist. This period, known as’regencia’, lasted until 1842, when Pedro the 2n d was proclaimed emperor o f Brazil. 3 7 The rebellions were against the monarchy centralization promoted by Pedro the 1st. 3 8 In our view, a land policy in that specific moment was not a priority because o f the abundance of land in Brazil in 1850. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 52 trade. In 1807, England had enacted the abolition of slavery and requested the same from its ally and partner, Portugal In the same year, Napoleon threatened to invade Portugal, unless the country were to break off its commerce with England. Pressured by both countries, Joao 6th , the Portuguese king decided to escape to Brazil with the 2,500 members of the royal court39. In 1808 the British navy arrived with the Portuguese in Bahia. In exchange, Joao 6th signed the 1808 ‘opening of the ports’ where Brazilian ports would be favorably opened to England. In 1810, Joao 6th signed two other treaties with England. One was a commercial treaty to last until 1826 that granted England preferential tariffs, lower than those on Portuguese goods and allowed England to appoint special magistrates in all cases involving British citizens in Brazil (extraterritorial rights). The second was an ‘allied treaty’ where Portugal agreed to promote the gradual abolition of slavery. 4 0 In. order to recognize the 1822 Brazilian independence, England obtained in 1827 an extension of the 1810 treaty until 1844. For the entire first half of the 19th century, these treaties hampered the autonomy of Brazil in the economic sector and according to Furtado (1964), the dominance of England in Brazil was almost absolute. Another relevant political event was the resignation of Pedro I, in 1831, and the eventual rise to power of the dominant colonial class composed of the heads of the export agricultural sector.4 1 Between 1832 and 1841, Brazil was governed by a group of 3 9 Bethel (1916), p. 26-30. 4 0 Bethel (1976), p. 50. 4 1 Carvalho (1988) explains that tbs ‘ colonial elite’ first originated on the sugar producers from the Northeast of Brazil bat after 1831 included the export coffee sector from Rio de Janeiro. According to R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 53 politicians. Known as the “regency period”, the politicians were in charge of the five year old heir until 1841 when he came of age to assume his position as the second emperor of Brazil, Pedro 2nd. The ‘liberal’ doctrine from Adam Smith was not applied in England itself but was applied abroad. Pressured by West Indies interests that saw the persistence of slavery in Brazil as the main reason for the decline in their share of the sugar market, Britain imposed protectionist measures against Brazilian sugar and increased pressure for the termination of the transatlantic slave commerce. The tension that prevailed throughout the first half of the 19th century between the two countries brought financial difficulties to Brazil. From 1810 to 1844, the customs privileges granted England a general 15 per cent ad valorem customs tariff during a period of stagnation in the value of foreign trade.4 2 Since Brazil was thereby unable to raise revenues from import taxes, it decided to introduce in 1843 an 8% ad valorem tax on exports. 3X2.2 - Revenues from Trade The decrease in import revenues, between 1810 and 1844, were magnified by the economic difficulties in the northeastern provinces. Bahia, Pernambuco and Maranhao, were facing a steady decline in the international price of sugar, while Carvalho (1988), the convergence of interests in 1831 did not continue until 1889. In other words, in the 1840s we started to notice more and more divergence between the southeastern and the northeastern provinces, especially regarding the continuation o f slavery. 4 2 Furtado (1964), p. 103. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 54 cotton prices dropped even lower. In the political arena, the 1830s and 1840s were a period of rebellions that were also threatening to the parliamentary monarchic order. In the midst of these problems, coffee, produced in Rio de Janeiro and Sao Paulo, began to emerge as a new source of wealth for Brazil. By the 1830s it was gaining ground as the main export crop and showed steady progress. Table 3.1 Leading Brazilian Export Products as a Percentage of Total and Total Export Value Periods! Products % Share of Tota Brazilian Exports Total Exports in 1,000£ Coffee Sugar Cotton Rubber Leather Total 1821-1830 18.4% 30.1% 20.6% 0.1% 13.8% 82.8% 39,117 1831-1840 43.8%, 24.0% 10.8% 0.3% 7.9%, 86.8% 51,898 1841-1850 41.4% 26.7% 7.5% 0.4% 8.5% 84.5% 56,051 1851-1860 48.8% 21.2% 6.2% 2.3% 7.2% 85.7% 104,573 1861-1870 45.5% 12.3% 18.3% 3.1% 6.0% 85.2% 150,540 1871-1880 56.8% 11.8% 9.5% 5.5% 5.6% 89.0% 202,610 1881-1889 61.5% 9.9% 4.2% 8.0% 3.2% 86.8% 283,720 Source: IBG E, Separata do Anuario Estatistico do Brazil, 1939/1940, p. 90. In fact, coffee exports contributed to improve the financial situation of the central government. The change in the export composition, between 1830 and 1840 implied that the balance of power was starting to change so as to include more representatives of the coffee provinces, most of whom were landowners. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 55 Table 3.2: Coffee Production and Population in Sao Paulo and Rio de Janeiro: 1836 Zones of Sao Paulo Province and Rio de Janeiroa 1836 Coffee Production 1838 Population In arrobas) % total Tofafj Brazilians! % zone} Slaves % zone Capital (1s t ) - - 27,364 21,989 80% 5,375 20% Paraiba valley (2 ^ 473,498 17% 105,878 77,076 ' 73% 28,802 27% Sorocaba (3fd ) 18,790 1% 25,707 17,747 89% 7,960 31% Central {4ft) 56,369 2% 77, m 53,241 69% 23,876 31% Mogiana(5, J 1 ) 821 0% 20,341 17,604 87% 2,737 13% Paulista (6t h ) 1,264 0% 2,764 1,827 66% 937 34% Araraquarense (7ft) - - - - - - - Noroeste (8th ) - - - - - - - Alta Sorocdbana (9®) - - - - - - - Baixa Sorocabana (10th ) - - 6,462 5,313 82% 1,149 18% Southern Coast (ff*) - - 18,677 11,562 62% 7,115 38% Total Sao Paulo(1sM1th zone) 556,739 19% 284,312 206,359 73% 77,953 27% Paraiba valley (2a < l) 479,486 17% 105,678 77,076 73% 26,802 27% Western Plateau ) 56,454 2% 100,225 72,672 73% 27,553 27% Rio de Janeiro 2,321,710 81% 591,000 341,000 58% 250,000 42% Total Sao Paulo and Rvo 2,878,448 100% 875,312 547,359 63% 327,953 37% Note: (a): For more information on the Sao Paulo zones, please refer to Appendix 1. Sources: Rio Coffee production: 1855 Annual Report from the Provincial President of Sao Paulo, Anexo A, page 80, Maps s.n. For Sao Paulo coffee production: Catnatgo, Vol. 2, p. 62. For population, Camargo, Vol. 2, p.2-12. For Rio de Janeiro population: IBGE, 1987, vol. 3, p. 29-30, Estatisticas Historicas. According to table 3.2, Sao Paulo coffee production was concentrated in 1836 in the Paraiba Valley (2n d zone), a hilly region linking Sao Paulo to Rio. Though more detail about the zones can be found in Appendix 1, it is important to stress that besides the Paraiba Valley, Sao Paulo had six distinct (but geographically related) zones that we call here the ‘Western Plateau’, or the hinterlands. While the Valley had its golden years during the Empire the western plateau started to emerge in 1854 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 56 and flourished as the leading coffee zone in 1905. In 1836, coffee produced in Rio de Janeiro accounted for 31% of total Brazilian exports. Production there relied entirely on slave labor. In 1844, Brazil refused to grant England an extension of the commercial treaty. In turn, the country increased its import tariffs, which then, fostered a surge of industrialization. Thereafter, the monarchy regained political and economic control. In part, the return to the political stability was due to coffee exports that provided the financial and human resources for the consolidation of the nation state. 3.1.2.3 The Politics of the Coffee Producers During the colonial period (1500-1821), Brazil experienced both sugar and gold cycles. While production remained in the colony, Portugal enjoyed the monopoly over trade and marketing. Therefore, the linkages produced during the former ‘cycles’ were very weak, mainly because of Brazil’s inferior political condition. Quite possibly, therefore, the coffee story would not have been very different from those of gold and sugar, had it occurred during the colonial period. As an independent country, coffee proved to be different from the colonial gold and sugar, in the sense that it fostered a whole set of linkages in the labor, land and credit markets. The coffee producers from the imperial period, were people with previous business experience, accumulated from their activities as merchants in the former gold cycle. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 57 In general, planters were involved in all the phases of the productive process: acquisition of land, slave trading, internal transportation, marketing at the ports, official contacts and involvement in financial and economic policies of the country. The proximity to the capital of the country was of great advantage to the rulers of the coffee economy. As explained by Furtado (1964): B ut what particularly singles out the coffee m en is not m erely the fact that they acquired control of the government; it is rather the fact that they utilized th at control to attain objectives perfectly well defined w ithin the context o f a specific policy. It was this clear concept of their ow n interests that differentiated them from other dom inating groups previously existing(Fiutado, 1964, p. 126) Among the coffee producers, the ‘Saquaremas,4j emerged in 1340s as an influential voice mainly expressed through the Conservative party. The most prominent figures from this party, like Paulino Jose Soares de Souza, Visconde do Uruguai, Joaquim lose Rodrigues Torres, Visconde de Itaborai, Pedro Araujo Lima (Marques de Olinda), Eusebio de Queiroz and others, were part of the ‘saquarema’ group and were the largest coffee producers in the Rio region. Uricochea (1980) and others agreed that the continuation of slavery was the political basis of (their) support for the Empire. By contrast, land never became a political matter during the Empire and hence it is puzzling to observe authors arguing, all of a sudden, that land regulations became 4 3 This group was from Saquarema, a leading coffee region in Rio, or had family ties with the leading coffee producers, from that area. Mattos (1987) explains that, during the Empire period, ‘saquarema’ meant ‘ protected’, ‘favorite’ once this group won all the elections in Saquerema, because they ‘protected’ the electors against the any political change in the local elections. We included the Paraiba Valley coffee producers as part o f the ‘saquarema’ elite. There are many reasons for this choice, but it is enough to say that they were extremely similar to the Rio coffee producers, especially in the provision of credit (through factors), labor (slaves) and land (mainly latifiindio). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 58 a national issue deserving a new law. The question that remains without an answer is: why would the political elites lobby for a law to reduce their monopoly rents on land? 3.1.3 The Restrictions in the Labor Market: The Labor Laws The absence of a land policy contrasts with the regulations in the labor market. According to Plateau (2000): When a natural resource, say land, is abundant, there is by definition no competition for it. The critical issue is access to labor, not to land. In such circumstances, private property' rights in land are not useful nor economically justifiable, (p. 75). Slavery was a solid institution in Brazil, and the formal market was well developed. The elastic labor supply was critical for the production of crops and its sudden termination might threaten the future of the export economy. The market for slaves was a monopoly. Dominated by the Portuguese, the largest traders were located in Bahia. British insurance companies provided the necessary hedge against any random event that might occur on the trips. Slaves were a source of labor and an investment. In fact, as explained by Engerman and Fogel (1989), the plantations were economically profitable due to the presence of slaves. As an investment in a semi-barter economy, slaves assumed the store of value, medium of exchange and unit of account role of money. Until 1850, carioca4 4 coffee farmers, received a certain number of slaves in exchange for their coffee, and used them as collateral for loans. The market for slaves was heavily regulated, with barriers to entry and 4 4 Cariocas are the people from Rio de Janeiro, and panlistas are the ones from Sao Paulo. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 59 profitable. The labor market was functional for the export economy and bore close resemblance to that of the southern part of the United States (Engerman & Fogel, 1989; Conrad & Meyer 1964). In all the treaties between England and Brazil between 1827 and 1845, there was a clause requesting the combat and then the termination of international slave trade. In part, because slavery was a stable source of political support, these clauses were not enforced by Brazil. In the first half of the 19th century, the most important treaties between the two countries with clauses regarding the abolition of slavery are: the 1808 ‘opening of the ports’; the 1827 English recognition of the independence of Brazil; the 1831 gradual slave combat: for fifteen years slave commerce would be considered illegal but it would only be after 1845 that slave merchants would be deported from Brazil.4 5 We observe in the following table, that the number of slaves imported between 1836 and 1850 was extremely high, especially considering that an 1831 bill to prohibit the commerce was in place making the trade illegal. As previously explained, the 1831 treaty with England lasted for 15 years. One year prior to the termination of the treaty, England enacted the 1845 Aberdeen Act4 6 that considered it legal to seize and confiscate any ships transporting slaves and the perpetrators would be extradited and sentenced to prison in England, under its laws. At first, Brazil did not accept the Act claiming that it was a threat against its 4 5 Bethel (1976) and Pintado (1964). 4 6 Bethel (1976), p. 254-258. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 60 sovereignty. Yet, England started to seize most Brazilian ships to the point that the British navy blocked the Rio de Janeiro harbor to search all the ships leaving Brazil. The Aberdeen Act led Brazil with no choice but to approve a law, in 1850, that would effectively end the International slave commerce: the Eusebio de Queiroz Law. Table 3.3: Slave Imports to Brazil: 1822-1855 Year NumbepYear NumberYear Number 1822-27 150,000 1828 48,080 1829 87,000 1830 60,000 1831 138 1832 116 1833 1,233 1834 749 1835 745 1836 4,966 1837 35,209 1838 40,256 1839 42,182 1840 20,796 1841 13,804 1842 17,435 1843 19,905 1844 22,849 1845 19,453 1846 50,324 1847 56,172 1848 60,000 1849 54,061 1850 22,856 1851 3,287 1852 800 1853-54 0 1855 90 Total 812,426 (1822-55) Source; Foreign Office memorandum, August 04, 1864. Adapted from numbers quoted in Leslie Bethel, The Abolition o f the Brazilian Slave Trade, p. 368. The 1850 law to terminate the transatlantic slave commerce, known as “Eusebio de Queiroz” law4 7 , meant that the labor supply for the plantations could no longer come from abroad. Though the contents of the 1850 Eusebio de Queiroz law were similar to the 1831 bill, the difference was that the law became a credible one. With the support of the British navy, the slave merchants would be arrested and deported from Brazil and the slaves would be freed. It took until 4 7 Bethel (1976), p. 309-361. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 61 1855 for the transatlantic commerce to end. After that all that remained in Brazil was the internal commerce of slaves. As an institution, slavery was officially extinguished in 1888 and between 1850 and 1888 the internal traffic from the northern to the southern provinces supplied part of the slaves. However, as explained by Merrick & Graham (1980), the high mortality rate of Brazilian slaves meant that another source of labor supply had to be introduced to substitute for slaves. 3.1.4 The Origins of the 1850 Land Law The 1843 land and colonization project provided the basis for the enactment of the 1850 land law. The project was created by Bernardo Pereira de Vasconceilos4 8, a member of the state council, known as the ‘monarchy’s brain’. The most important laws came from this office: the land law; the law freeing people bom from slave mothers, and the Eusebio de Queiroz law. A project coming from the state council meant that the issue was or would become a national priority. While the Eusebio de Queiroz law was proposed and approved in less than one month, the 1850 Land Law was first presented in 1843. The law remained in the Senate until 1850, when it was finally approved. We provide here the main aspects of the 1843 and the 1850 debates that in turn, led to the 1850 land law. 4 8 Vasconceilos was the leader of the “Saqaerema group”, himself a coffee producer and a lawyer from Coimbra. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 62 The project had the key elements that would prevail in the 1850 land law and it linked the land and labor problems in one single proposal: “the main goal of this project is to promote the immigration of workers” 4 9 The market for immigrants had been increasing since 1700, when England started sending ‘indenture servants’ to their North American colonies. While the rules were not as well defined as the market for slaves, migrants chose countries where they could become landowners. To grant titles to immigrants, the government had to know the location of its lands. This is why the ‘land law’ was a way of separating public from private land. The state council recognized that the project was inspired by the ideas of E.G. Wakefield, on the colonization of East Australia, where there was plenty of land and a shortage of labor. The original idea was to increase the price of public land such that immigrants had to work for a while before acquiring a piece of land. The proceeds from the sale of land would then be used to bring more immigrants that, in turn, would work in the fields and then acquire more land. The Wakefield system was known as ‘self-supporting system’ since the government would not need to use its resources to attract immigrants, rather the financing would come from the sale of land. A revised version of the project was then presented in June 1843 in the house of representatives by the minister of the Navy, Rodrigues Torres. While the 1843 4 9 Parecer da Secao do Conselho de Estado, Exposicao e Projeto de Colonizacao e Sesmarias Aprovados na Sessao de 8 de Agosto de 1842, Aiquivo National, Codice 49, v. I. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 63 proposal was Inspired by Wakefield, the 1850 law recognized the failure of the East Australian experience that had been Inspired by Wakefieldian theory. As a result, the 1850 law eliminated the ‘self supporting mechanism’ by granting immigrants the possibility of acquiring land for a very low price or even for free. The 1843 project had 29 articles and we summarize here the three main parts.3 0 The first part dealt with the revalidation of illegal lands, both land grants and posses. To receive a title, owners were required to have a surveyor come to their land to measure it. The maximum size for a posse was 2.18 hectares and 9 hectares for pasture lands. The project established that even unused land acquired through adverse possession or land grants could receive a title.5 1 The second part refers to the role of the government. The project created a land tax equal to $2.08 per 4.36 hectares. Also, the landowners would have to pay the government a fee equal to $18.72 per 4.36 hectares to start the revalidation process.5 2 The imperial government would sell public lands In plots o f 2 hectares and no further concessions of land would be granted. The project prohibited adverse possession and the ones who did not follow the law could face jail time. The third block of 5 0 For tiie proposal o f the 1843 land law refer to: Anats do Padamento Btasiieiro, Camara dos Senhores Deputados, Vol 1, 1843, Secao de 10 de Junho de 1843, p. 592,593. 5 1 It is important to note that in the 1843 project unused land would receive a title, as long as the owners paid the land tax. Because the tax was dropped from the 1850 law, landowners would receive a tide only on the fraction of the land that was being used for productive purposes. 5 2 In comparative terms, the price of one slave, in 1843 in Vassouras, was equal to $312.00 (source: Stein, 1957, p.229). The land tax represented 0.15% of the slave price and 1.38% of the revalidation fee. The price o f one hectare of land in Rio Ciaro, in 1857 was equal to $33.47 per hectare. Thus, the land tax represented 1.43% of the total land price and revalidation fee 13% of the land price (Source: Relatorio do Presidente da Provincia de Sao Paulo de 1857, Diogo Pereira de Vasconcellos, Sao Paulo: Typografia Dous de Dezembro, Sl-5 to Sl-14). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 64 the project dealt with immigration and colonization. The original and optimistic idea was that proceeds from the public land sale would be used to finance immigration to Brazil. The immigrants would not be allowed to buy land for three years after arriving in Brazil.3 3 However, given the constraints with the termination of slave imports and the immediate need to introduce immigrants, the 1850 law allowed immigrants to receive free land. It took two months of discussion and 114 speeches made by 28 of the 101 representatives for the project to be approved in the house of representatives.3 4 The defense of the project was mainly done by Rodrigues Torres, Bernardo de Souza Vasconcellos, Eusebio de Queiroz, Paulino Jose Soares de Souza, all of them members of the ‘saquarema group’, coffee producers and Important public figures; by the representative from Ceara, Manuel Jose de Alburquerque and by Francisco Dlogo Pereira de Vasconcelos, Bernardo’s brother. The most violent opposition came from the Pernambuco representatives, Urbano Sabino and Nunes Machado and from Bahia, Manuel Galvao. In general, there was little disagreement that Brazil needed to solve the labor shortage before the problem emerged. Both Vasconcellos and Rodrigues Torres 5 3 The idea, inspired in Wakefield was to have the immigrant for a while as a rural worker before he becomes a landowner. This restriction was for the immigrants whose transportation was paid by the government. Mueller (1995) described a very similar procedure for granting land in Virginia and oilier American colonies during the IS4 , century, known as headlight system. 5 4 Approved in September of 1843, the project remained in the Senate until 1850, when it was finally approved by the Senate and then went again to the Lower House. Here we address only the main points of the 1843 debate in the house of the representatives. The complete debate can be found in: Anais do Parlamento Brasileiro, Camara, do Senhores Deputados, Tomo 1 e 2 (secoes de 10 de Junho a 27 de M ho de 1843); Anais do Parlamento Brasileiro, Camara do Senhores Deputados, tomo 1, (secoes de 20 de agosto a 3 de setembro de 1850). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 65 explained that it was a matter of time for slavery to be completely abolished and the shortage of labor would cause problems in the rural areas, similar to the ones faced by Haiti and Argentina: Mr. President, in this project we have the basis for a perfect colonization system. In its dispositions I find that public land cannot be freely acquired, neither through adverse possessions nor through land grants; it is also explained that the sale of land is the only way to transfer landownership and lastly that the proceeds from land sales will be used to import foreign labor, as a gradual substitute for African slaves. We should not fool ourselves: slavery w ill come to an end in ten years, at the most. If we do not act in advance, we w ill be facing the same problems as Haiti. (Bernardo Pereira de Vasconcellos, Anais da Camara dos Deputados, Tomo II, July 24, 1843, p. 389) The north opposed the immediate termination of slavery and the southern provinces demanded a long-term solution for the shortage of labor problem. In the short run, the internal commerce of slaves, from the north to the south, was an intermediary solution for both regions. In the long ran, another permanent source of labor would have to be introduced to satisfy the labor demand from the coffee economy. We see the 1850 land law as a compromise solution between the demands from the north and the south. A radical abolition of slavery would threaten the political stability of the regime, given the fierce opposition of the north. The 1850 land law would introduce a transitional period where slave and free labor would co-exist. The solution was not a perfect one because immigrants would rather go to a country without slaves and thus the presence of slavery would decrease the number of immigrants coming to Brazil. However, given the external constraints imposed by England on slave commerce, the 1850 land law was a consistent solution for both northern and southern regions. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 66 The three most radical issues in the project, the maximum size for land grants and posses, the revalidation fees and the land tax received fierce opposition during the debates. According to Mr. Luiz Carlos da Fonseca from Minas Gerais, all the land in his region was acquired through ‘posses’ but most of them were much larger than the maximum size proposed by the law.5 5 The revalidation fee5 6 was considered too high for some distant areas of Brazil. According to the representatives, there was no incentive for landowners to measure their plots because land had no value and therefore they would not comply with the requirement. The land tax received opposition from almost all the members, except for Vasconcellos and Rodrigues Torres. Mr. Galvao from Bahia argued that the land tax could induce a civil war against the Empire that would threaten the constitutional order. Galvao also said that the majority of the landowners from his province (Bahia) could not afford the land tax.5 7 The 1843 project was approved and sent to the Senate in the October of the same year. The two major issues of opposition, maximum size for posses and sesmarias and land taxes were dropped and the revalidation fee was decreased. In 1844, the conservative cabinet fell and the bill remained locked up in the senate through successive Liberal governments until the return of the conservatives in September 1849. In the interval, the economic and political situation of the 3 5 Anais da Camara dos Deputados, Secao de 24 de Julho de 1843, Tomo II, p. 394. 5 6 The fee was equal to $18.72 pei 4.36 hectares. 3 7 Anais da Camara dos Deputados, Secao de 27 de Julho de 1843, Tomo II, p. 424, 442. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 67 country had changed. The British government was relentlessly pressing the Brazilians to abolish the slave traffic. Meanwhile, in Australia, the Wakefieldian experiment had gone awry whereas the United States was emerging as economic success, attractive to the landless European immigrants. The 1850 land law is therefore a combination of the experiences from, both Australia and America, as proposed by the Senator Miguel Calmon from Bahia. 5 8 The 1843 project remained in the Senate until 1850, when it was finally approved and, like any other project, went to the lower house. The senators introduced the possibility of granting public land for free for immigrants willing to work in agriculture. From the Senate the project went to the lower house, where it was approved after six rounds of debates. In the lower house, there was no single representative who believed that the law would improve or even create land legislation. The overall impression was that the land regulations were not going to be followed, mainly because land was not a constraint and hence, any positive amount spent on registration would involve costs greater than the benefits: This is a political project to solve the labor problems from the Rio and other southern provinces. It is clear that the population of my province will not follow' the procedures to receive a title on their lands, mainly because land has no value and the titling process requires a huge sum of money, for something that has no value (Sr. Franco de Sa, representative from Maranhao, Anais da Camara dos Deputados, Secao de 2 de setembro de 1850,vol. 3, p. 774) 5 8 Mr. Calmon seemed to know in detail both experiences (Australia and United States), according to Ms statements In the Anais da Camara dos Deputados, 1850, tomo 3, p. 767-775. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 68 Some aspects became clear from the debates. First, the representatives agreed on immigration as a way to promote a peaceful transition towards a free labor economy. The costs associated with such a measure were the main source of opposition. The assumption was that all regions equally needed immigrants and thus would be willing to socialize the costs to attract immigrants to come to Brazil. In fact, it was the coffee regions of Rio de Janeiro and, to a lesser extent, those in the Paraiba valley of Sao Paulo that needed immigrants whereas in the north and northeast, the need for immigrants was not crucial since the decline of the sugar economy left the region with excess slaves. According to Urbano, a representative from Para, the project was benefiting the coffee producers at the expense of all the other regions.3 9 It is clear that the “Saquarema group”, a wealthy and politically strong coffee region in Rio de Janeiro strongly supported the law, and Its main representatives were Rodrigues Torres, Vasconcellos and Rio Branco. The second aspect is that the project was proposing a compromise solution between the regions to preserve the unification of the country and avoid further regional rebellions. To preserve slavery the northern representatives agreed on ‘socializing’ the costs of immigrants and, in exchange for their support, the southern ones agreed on postponing any further discussion of the complete abolition of slavery. In brief, the main goal of the project was to create the institutional conditions to attract immigrants. The first condition was the creation of an annual budget to be 3 9 Anais da Camara das Deputados, 1850, tomo 3, p. 432. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 69 used for ‘colonization’ purposes. The second condition was, to grant titles for immigrants, the government had to know the location of public lands. To avoid confrontation with private owners, the land law did not expropriate any landowner; rather it requested private owners to start the revalidation process. Public land was then defined by exclusion: whatever was not in the private domain was considered public land. 3.2 The 1850 Land Law The 1850 Land Law was approved 14 days after the Eusebio de Queiroz law prohibiting commerce in slaves was enacted. The 23 articles of the 1850 land law can be summarized in four parts. a) As regards public lands;6 0 - Public land could only be acquired through purchase; - Those that occupied public land, from them on, would be penalized; - Special reserves would be created; - The government was creating the Genera! Bureau of Public land (Reparticao Geral das terras Publicas), to coordinate the measuring, division and description of public land. This office was in charge of colonization and entitled to an annual budget to finance its activities. b) As regards the legitimization of irregular property: 6 0 The law defines public lands as: Public lands axe: those which do not have a private owner and receive the land as sesmarias; lands not used by squatters (even if it is not up to code). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 70 The sesmarias which had not followed all conditions (cultivation, demarcation and confirmation) would be revalidated; The posses and sesmarias should be measured and titled within a fixed period of time. Those who fail to comply with the law would not receive titles to their property and thus could not mortgage or sell the property, fn this case, the ‘owner’ would have only the right to use the land and the unused portion was considered public land;6 1 The posses to be legitimized were limited to an area equal to that which they cultivated plus four times that area, if available and not exceeding half a square league (1,089 hectares); - There was no limit to the number of posses; - Rules were set for the resolution of eventual disputes from the regularization (posses might be in a sesmaria); c) A.s regards the Empire’s revenues and fiscal matters: - The government was authorized to sell plots of public land with an area never less than 121 hectares (250,000 square bracas). The maximum price for 121 6 1 There are 2 dispositions in fee law feat contradict each other. According to Art. 4 fee sesmarias and posses that did not have a title could acquire one by paying the fees and measuring the productive part of their lands. According to article 8, the sesmeiros and posseiros who did not register their properties, would not receive a title but also would not be evicted from their land. Sesmeiros and posseiros were entitled to use rights but could not mortgage their lands. During the Republic, many lawyers interpreted that titling process o f private land was optional since even without a title, owners would not lose their lands. The main implication was automatic validation of the property, without measurement requirements in the 1895 land law in Sao Paulo. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 71 hectares (or 299 acres) was $271 ($2.24 per hectare or $0.97 per acre)6 2 The minimum price for the same size plot was equal to $136 ($1.12 per hectare or $0.45 per acre). Public land was sold in auctions and the sale price was to include the measurement costs, d) As regards colonization: - The price of public land should be set taking into account the interest of colonization. The government is entitled to grant land for colonization purposes; The government is authorized to bring, at the expense of the Treasury, a certain number of immigrants to be employed in rural areas of Brazil; - If the proceeds from public land sale and land registration were not enough to cover immigrants’ travel costs, the government was entitled to use the resources from the Treasury to such an end; - The remaining share of the proceeds would be used to measure public land; 3.3 The 1854 Statute The 1854 statute set the main dispositions to regulate the 1850 land law. Among other issues, the statute created offices in charge of the measurement and titling process. It also defined the role of the provincial presidents and judges in the whole 5 2 In the United States until 1854, Federal government sold public land for $1.25 per acre. After the Graduation Act (1854-60) land prices decreased to 12.5 cents an acre. In 1862, the American government promoted the Homestead Act where every person (American or immigrant) that had never fought against the US could become the owner of 160 acres of land by paying $ 10 for titling purposes. Source: Lebergott, Stanley (1985). “The demand for Land in the United States (1820- 1860).” The Journal o f Economic History, XLV (2), p. 181-212. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 72 process. The procedures for measuring public lands were different from the ones set for private land. The provinces had to inform the General Bureau of Public Land (“Reparticao Geral de Terras Publicas”), the regions where public land was available. These regions would then be divided into districts and each one would contain a branch of the general office in charge of measuring and forming plots of 121 hectares. The measurement of private land was under the provincial president’s jurisdiction. The president would request the judges, municipal judges, police officers, district attorneys and ’peace judges’ (juiz de paz) to inform him of the existence of ‘posses’ or land grants that were subject to validation. With that information, the presidents would nominate a ‘comissario judge63’ to each of the districts where illegal properties existed. The whole process would start, however, only if the private owner requested the ‘comissario’ judge to measure his land. The deadlines for measuring private lands were set by each provincial president, and they could always extend or postpone the deadline. After measuring the private plots, the surveyor would send a copy to the public land office and the original to the 6 3 It should be noted that the eonhssatio judge was not a figure that came from the magistrate. Any Brazilian citizen could be nominated a ‘comissario judge’. Even in the literature produced by the magistrates and lawyers, there is plenty' of controversy on why the Imperial government created a figure (the comissario judge) specifically for the purposes of regulating private properties. In our view, the comissario judge represented the interests of the major landowners in each region. In turn, the private land titling process relied heavely on the decisions made by the comissario judge and the provincial president. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 73 provincial president. Upon payment of the required fees,6 4 the title was then signed by the provincial president. Whereas the central government was in charge of selling and measuring public land, the provincial presidents had full autonomy towards the measurement and titling of private land. The ‘parish priest’s registration’ was another device created by the 1854 regulation with the intention of creating a ‘map’ with the location of the private lands in the different provinces. To such an end, the regulation established that the priests had to announce during mass that claimants were requested to ‘register’ their lands with their parish. Each parish then had to create books of registrars, where the owners would then write a declaration containing the landowners’ name, the district where the land was located, his status (posseiro, sesmeiro), the plot size (if known) and the boundaries (if known). The declarations were written by the owners in duplicate. According to article 102, the priests had to accept any declarations. After the deadline, set by each provincial president, the registration books were sent to the director of public land in charge of each province such that he could create a general registration of private lands. The main aspect is that, according to article 94, the parish priests’ registration did not entitle the owner to receive a title, to transfer or mortgage the property. The proof of landownersMp was the land title, obtained upon 6 4 The measurement costs for private land ranged from $Q.02/acre (0.06fheetare) to $0.05 acre ($0.11/hectare) and the payment of a flat fee ($5.04) fox administrative purposes. Small claimants (with an area less than 121 hectares) were exempt from the payment o f thesc fees on the measurement of their lands. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 74 fulfilling the requirements of measurement, productive use of the land and payment of the fees. Only two provinces, out of twenty, completed the parish priest registration: Santa Catarina and Sao Paulo. Only in 1895, when Brazil was a Republic, did Sao Paulo and only Sao Paulo create a land law in which claimants were entitled to use the ‘parish priest registration’as a proof ownership/residence. 3.4 Conclusions In this chapter our main goal was to investigate the determinants that led to enactment of the 1850 land law. During the Imperial period, land was not a constraint and until 1822, the formal land policy, based on the sesmaria system, was highly ineffective in creating a land market. In fact, adverse possession was the dominant means whereby land was acquired and Tatifundios’ were created. The suspension of the formal land policy in 1822 did not change the previous situation, given the dominance of adverse possession even prior to the 1822 suspension of the sesmarias. The export economy was constrained by conditions in the labor market. The profitability o f the latifundios depended on the continuous supply of labor. The 1845 Aberdeen Act and the 1850 Eusebio de Queiroz law led to the interruption of commerce in slaves. The 1850 land and colonization law proposed the introduction of immigrants, during a transitional phase, where slaves and free labor would co R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 75 exist. The law was enacted to soive the bottleneck in the labor market created by the termination of international slave commerce. It seems that the 1850 land law was not trying to solve any problems in the land market because the critical issues to be solved were in the labor market. According to Carvalho (1988, p. 318) the manpower was the theme that appeared more frequently in the yearly speeches delivered by the Emperor (34 speeches in 56 mentioned the labor problem). In brief, the representatives approved the 1850 Land and Colonization Law as a way of creating the institutional conditions to attract immigrants. There were two main reasons for the creation of a land law to regulate the labor market. First, the government had to know the location of their lands in order to start the measurement process that would provide immigrants with a titled plot of land. Second, before 1850 the country had no legal and regular provisions in the annual budgets to be used towards colonization. The land law created the Bureau of Public Land, whose main goal was to deal with colonization and public land. An annual budget was allocated for this purpose. In brief, in the scenario expounded in this chapter, the 1850 land and colonization law was intended to prevent a shortage of labor in rural areas with the inflow of immigrants. Indeed, as demonstrated in the next essay, the law was extremely successful in achieving its major goal - attracting immigrants. The 1843 proposal came from the State council, and hence, the theme was a national priority. The termination of transatlantic slave commerce and the future of the export economy were national priorities, not land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 76 Very few private claimants received a title on their lands. In our view, this is not a reason for considering the law a failure because it did not intend to solve the problems in the land market. In contrast, the law succeeded in paving the way for a successful policy carried out by Sao Paulo in 1880s to consolidate the transition to a free economy, given the requirements of the western planters and the institutional conditions introduced by the 1850 land law. Even if the law was trying to foster land rights, this was a secondary concern. Engerman (1973) suggested that when one factor of production - land - is abundant and the other has a definite set of rights, that he calls ‘property rights on men’, the system does not need another set of rights (on land, for example). It is only when the rights on men are abolished that we may observe a gradual change from the rights on men to the rights on land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 77 CHAPTER 4: IMPACTS OF THE 1850 LAND LAW ON THE LAND LAW ON THE LABOR, LABOR AND CREDIT MARKETS Brazil was the last country in the Western world to abolish slavery in 1888. The gradual abolition of slavery was successful not because of humanitarian reasons, or even because free labor was more efficient than slave labor. In our view, the transition towards an economy based on free labor was a peaceful process because the Empire had devised a set of institutional changes, summarized in the 1850 land and colonization law, that created the financial incentives required to attract immigrants. In. fact, these incentives were required to allow Brazil to compete with the other new countries in the market for immigrants. Given the incentives, the four agents in charge of recruiting immigrants - coffee producers, private colonization companies, the official settlements built by the Empire and the central government - cooperated to accomplish the common goal o f attracting the largest number of immigrants even during a time in which slavery' continued to exist. It is not until 1870s, with further momentum toward the complete abolition of slavery that the provincial presidents became the fifth agent in charge of attracting immigrants to Brazil. The inflow of immigrants, between 1850 and 1889 was especially important for the development of the Western plateau in Sao Paulo. Until 1850, coffee was produced in Rio de Janeiro and in hilly regions of the Paraiba Valley. After 1850, we R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 78 observe a gradual but steady increase in coffee production in the Western plateau of Sao Paulo. The interesting aspect is to observe that as early as 1855, coffee planters from this region, started to use immigrants instead of slaves in their farms. Due to the 1850 land law, planters from the western plateau of Sao Paulo started to benefit from the law to promote the inflow of immigrants. After the 1870s, the Paulista initiative towards immigration aimed at introducing immigrants as the main source of labor, instead of slaves. To reach such a goal, these planters created their own immigration agency and built the required infrastructure to attract immigrants. Although its importance is often belittled in the literature, we hope to show in this essay that the Empire was a critical period for the development of the major institutional conditions that enabled coffee to boom during the Republic. This essay has two related goals. The first one is to demonstrate that the 1850 land law successfully created a set of incentives to entice immigrants to come to Brazil. We did not find any document (official or not) asking for an improvement in the private property rights system. The second goal is to identify linkage effects of the 1850 land law on the labor, land and credit market. In particular, we focus on the Western Plateau of Sao Paulo where these linkages were particularly stronger. In the labor market, the law created the institutions and incentives to coordinate the inflow of immigrants. In the land market, we provide an explanation as to why more immigrants than Brazilians received titles to land. In the credit market, the 1864 and 1885 mortgage laws failed to identify land as a form of collateral. Credit was not a R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 79 constraint for the development of the Paulista Western Plateau because of the close- knit relationships between farmers and factors. The commercial banking system in Sao Paulo emerged from these relationships to ensure the provision of credit for the coffee economy and to match the increase in money demand with immigration. At the same time, the same group developed railroads and infrastructure that was conducive to increasing both coffee production and immigration. The findings presented here are almost entirely based on primary sources, namely the Annual reports of the provincial presidents from Rio de Janeiro, Sao Paulo and Minas Gerais and the reports from the Empire’s Agriculture ministry. We divide this essay into seven sections. In section 4.1 we introduce the international market for immigrants, the common rules and procedures adopted by the leading countries. The impacts of the 1850 law on the labor market are addressed in section 4.2. There we discuss the financial incentives provided by the law, the agents involved in recruiting the immigrants and, later in 1870, the role of the province of Sao Paulo in fostering immigration. In sections 4.3 and 4.4 we discuss the impacts of the law on the land and credit markets, respectively. Then, in section 4.5, we provide a brief overview of the Carioca and Paulista coffee market in 1886. The role of the paulista political elite in the fall of the Empire is the theme of section 4.6 and our main conclusions are in section 4.7. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 80 4.1 The International Market for Immigrants The 1850 land law was a pre-condition for Brazil to compete In the market for Immigrants. In fact, before 1850 Brazil had no regular provision in the budget to attract immigrants, and very few came to Brazil. Slavery gave Brazil a bad name among prospective immigrants. Free land and subsidized transportation were necessary conditions for Brazil to become a major bidder in the market for immigrants. The Land and Colonization office established by the 1850 land law provided the institutional conditions to attract immigrants. Until 1850, the international market for Immigrants was dominated by England. This country had a surplus population, as a result of the enclosure movement and the on-going industrial revolution. Fostered by Malthus’ ideas regarding the negative impacts of population growth on welfare, England followed his short-term prescriptions by sending the ‘surplus labor’ to their colonies that were under populated. The first immigrants that came to the United States, Australia, Canada, South Africa and New Zealand, were almost forced to leave England (due to the enactment of laws prohibiting the presence of vagabonds and poor peasants). Brazil’s experience with immigration was unique among the ‘new' countries’ because both slaves and immigrant free labor were the mainstay of Its commercial agriculture.6 5 But it was by no means alone In subsidizing immigration. In England 6 3 In the United States, immigrants went to the non-slave regions of the north and mid-west. Australia and New Zealand never had slaves (Willcox, 1931, Isaac, 1947 and Davie, 1936). According to Davie almost 90 percent of the 62 million people who left their native countries between 1829 and 1930 went to the Americas. Sixty percent o f them went to the US, 11 percent to Canada, 10 percent to R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 81 public assistance was granted to subsidized emigration of the poor to the US (Isaac, 1947). Wilcox (1931) showed that both the US and Canada had generous Homestead Acts of the 1860s and 1870s wherein any persons (including immigrants) over 21 could get public land for a minimal charge or even for free if they agreed to settle on it. In most immigrant-receiving countries, especially those in South America, immigrants were given financial assistance to help them acquire farmland. Several European countries gave out propaganda advocating the advantages of migrating to their colonies.6 6 The official reports of the Brazilian government between 1857 and the end of the Empire in 1889 often cited such actions of other countries as justification for increases in its own budget for immigration. For European immigrants, it was cheaper to go to the United States than to South America6 7 To compensate for this differential Brazil and Argentina offered a range of transportation subsidies for immigrants willing to come to South America. Despite the stiff competition, Brazil and Argentina were quite successful in these efforts. Between 1850 and 1889, Argentina, 7 percent to Brazil; 4.5 percent to Australia, 3 percent to New Zealand and 2 percent to South Africa. 6 6 According to Wilcox (1931, Vol 2), between 1847 and 1869, 339,000 were sent to Australia ‘under the auspices of the department at a cost of £ 4,864,000. ’ (p. 246). In 1873, England paid the transportation costs for 1,500 immigrants to New Zealand, who in tom, received land from the New Zealand government. In 1880, the Canadian and British government devised a scheme for developing jointly the northwest provinces of Canada. The Canadian government provided each settler with 160 acres of land and the British government advanced £80 per family for transportation costs. 6 7 Furtado (1964) attributes part of the high inflow o f immigrants in the United States to the low transportation costs. The tickets to the United States were lower than to any other country because the American ships that transported cotton to Europe returned almost empty, given the reduced amount of U.S. imports. The empty space in these ships was sold to immigrants. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 82 875,404 immigrants arrived in Brazil and 1,282,000 in Argentina.6 8 As a share of the population, even as early as 1870 immigrants constituted almost 2 percent of Argentina’s population and 3.4 percent o f Brazil’s. Argentina posed especially serious competition for Brazil in that it recruited immigrants from roughly the same countries as Brazil and yet its climate and agriculture were more like those of Europe and slavery had been abolished long ago. Despite these advantages, Argentina was unable to attract as many immigrants as Brazil until 1868, when Argentina enacted its first land law. In contrast to Brazil, which was politically and administratively highly centralized prior to 1889, each province in Argentina had the right to decide for itself whether or not to foster immigration. 4.2 The Impacts of the 1850 Land Law in the Labor M arket Despite its shortcomings as a Land Law, the Land Law of 1850 was key to the success in attracting immigrants to the coffee provinces and to the creation of counties mainly composed by immigrants. By creating the ‘Land and Colonization Office’ with its own annual budget, the land law gave Brazil an instrument to use in the competition for immigrants. For lack of institutional support, few immigrants came to Brazil prior to 1850, indeed only 17,000 between 1830 and 1850. But, beginning in 1853 the budget was regularized and as shown in Table 4.1 annual provisions towards colonization increased and with them also the number of 6 8 Numbers for Brazil from Carneiro (1950, p.60) and for Argentina from Wilcox (193 i , vol. 2, p. 153-155). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 83 immigrants. Articles 18-20 of the land law granted funds also for the measurement of public lands to be granted for immigrants and created the Bureau of Public Lands that initiated operations in 1854. Table 4.1 Amount Spent with Public Land and Colonization, Annual Budget and Number of Immigrants: 1841-1889 _________________ j^nnual Budget of the Imperial Ministry (until 1860) and (Agriculture Ministry (b/w 1860 (and 1889) (in USD) Share of the budget spent with with immigration and public lands {B as % of A) Immigration To Brazil To Sao Paulo Year Total {in US current dollars) Amount spent with colonization and immigration (in US current dollars) A B C D E 1841 - 1,941,608 39,040 2.0% 555 Q 1842 1,543,123 na na 5,568 0 1843 1,655,141 5,20q 0.3% 694 0 1844 1,623,312 5,100 0.3% 0 0 1845 1,422,781 4,680 0.3% 2,364 0 1846 1,562,284 no funds voted) na 435 18 1847 1,713,268 no funds voted) na 2,350 465 1848 1,604,278 no funds voted na 28 0 1849 1,694,799 no funds voted na 40 86 1850 1,854,425 116,000 6.3% 2,072 5 1851 1,958,303 no funds votec na 4,425 53 1852 1,935,664 no funds voted) na 2,731 1,023 1853 2,157,779 13,640 0.6% 10,935 765 1854 2,336,463 61,334) 2.6% 18,646 850 1855 2,710,023 121,283 4.5% 11,798 2,200 1856 2,782,502 208,55a 7.5% 14.008 1,123 1857 2,753,013 304,830} 11.1% 14,334 823 1858 3,130,357 500,701 16.0% 18,529 565 1859 4,067,406 414,097 10.2% 2 0 ,1 1 4 124 1860 4,597,769 366,007 8.0% 15,774 145 1861 5,551,813 475,405 8.6% 13,003 276 1862 3,321,387 435,342 11.4% 14,295 112 1863 4,516,588 470,373 10.4% 7 ,m 2 134 1864 4,859,093 333,018 6.9% 9,578 0 1865 4,723,383 291,261 6.2% 8,422 126 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. Table 4.1 Amount Spent with Public Land and Colonization, Annual Budget and Number of Immigrants: 1841-1889 (cont.) Annual Budget Imperial Ministry (until 1880) and Agriculture Ministry fb/w 1860 and 1889) (in USD) Share of the budget spent with with immigration and public lands B as % of A) Immigration To Brazil To Sao Paulo Total fin US dollars) Amount spent w/h colonization and immigration f fin US dollars) I Year A B | C D E 1866 4,500,847 278,4121 6% 7,699 155 1867 5,481,250 285,881 5% 10,842 1,000 1868 4,168,284 243,541 6% 11,311 200 1869 4,502,88a 441,18d 10% 11,527 152 1870 5,368,878 401,940 7% 5,158 159 1871 5,884,173 417,235 7% 12,431 83 1872 6,828,621 590,58Q 9% 19,219 323 1873 7,599,647 820,747) 11% 14,742 590 1874 8,869,587 1,040,000) 12% 20,333 120 1875 9,732,340 1,100,0001 11% 14,590 3,289 1876 8,797,956 918,00Gi 10% 30,747 1,303 1877 9,102,371 918,00d 10% 29,468 2,832 1878 7,368,967 909,920! 12% 24,456 1,678 1879 6,391,618 926,684 14% 22,788 953 1880 9,625.402 nal na 30,355 613 1881 8,394,197 88,440 1% 11,548 2,705 1882 9,992,558 411,310 4% 29,589 2,743 1883 11,388,485 353,555 3% 34,015 4,912 1884 10,710,884 337,455' 3% 24,890 4,868 1885 9,252,185 354,140! 4% 35,440 7,630 1886 13,959,441 1,053,391 8% 33,486 9,534 1887 15,547,094 1,111,046! 7% 55,965 32,110 1888 17,995,572 1,309,447, 7% 133,253 91,826 1889 19,810,539 1,873,458' 9% 65,246 27,694 Total 289,793,32$ 20,350,74$ 7% 887,438 206,365 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 85 Table 4,1 Amount Spent with Public Land and Colonization, Annual Budget and Number of Immigrants: 1841-1889 (cont.) Sources: Column A: Relatoiios Anuais do Mmisteiio da Fazenda: up to 1860 the budget is for the Imperial Ministry and from 1861 to 1889 we report the Agriculture Ministry annual budget. Column B: “Lei de 30 November 1841, art 2, § 30,” Brazil, Leis de 1841.1 , p. 74; “Lei de 21 de outubro de 1843, ait. 2 § 22 and art. 50,” Brazil, Leis de 1843.1, p. 51 and 78; “Lei de 18 de setemhro de 1845, art. 48” Brazil, Leis de 1845. 1 , p. 71; “Lei de 18 de setemhro de 1850, art. 20” Brazil, Leis de 1850,1 , p. 312; For 1853 -1859: Animal Reports from the Empire Minister, under the item “Reparticao Especial das Terras Publicas”. For 1860-1889: Annual Reports from the Agriculture Ministry’ , under the item “public lands and colonization”. Column C: Estimate on the amount spent on immigration and colonization out of the annual budget from the Empire Ministry (until 1860) and from the Agriculture Ministry (between 1861 and 1889); Column D: Cameiro, (1950), p. 60.; Column E: Vasconcellos (1941), Quadro A-l. The enthusiasm of the Imperial government for immigration was based on its desire to retain power after the foreseeable end of slavery. It delegated part of this responsibility to proprietors and private companies to promote colonization but retained part of it for building official settlements. The Bureau of Public Land’s branches in the provinces (‘land and colonization’ offices) had agents in charge of establishing contracts with private companies and others to measure public lands to build settlements. The main idea behind these settlements was to foster the creation of small properties. This was done largely in the unoccupied zones of the country. In the beginning, however, few of these came to coffee growing areas. The Empire’s use of private colonization companies to promote immigration was a way of shifting the risks of such enterprise from the government and also avoiding principal-agent problems. These companies, either partnerships or individually owned, had contracts with the Bureau of Public Land specifying such matters as whether or not the company was responsible for transporting the immigrants from Europe, whether public land was granted or sold to the companies, R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 86 the total number of immigrants required, the duration of the contracts and the size of the plots to be granted to immigrants. The companies in turn, signed contracts with the immigrants in Europe that were binding in Brazil. While the terms of these contracts varied among companies, there were two commonalities: the immigrant should receive a title on the land and the immigrant was prohibited from buying slaves while living on the settlements. The large colonization companies had their agents in Europe to recruit immigrants, had permanent contracts with the government and were highly subsidized.6 9 These usually colonized large areas. But there were also colonization companies created by adventurers, assisted by shareholders. Usually, shareholders were former slave owners with the means or contacts to transport immigrants but with little interest in screening the candidates. The first corporation established along these lines was the ‘Central Colonization Agency3 (Agenda Central de Colonizacao) in 1857, with an annual endowment equal to $500,000 dollars.7 0 Such an amount was to be spent with the inflow of 50,000 immigrants over the next five years. The company was devised to reduce the transaction costs among individual planters. In 1858, the company failed financially but the government created in its place regional branches in Sao Paulo, Bahia, Pernambuco and Para to which it granted over $3 69 In fact, the municipality ofBlumenau, in Santa Catarina, was successfully founded under such aninitiative. 0 Luiz Pedreira Couto Ferraz, Relaiorio do Ministro do lmperio para oAnno de 1857 apresentado a Assembleia Legislativa na f ' Sessao da l(f' Legislatura. p. 23-28, Anexo E p. 34, Anexo F p. 1-7. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 87 million (6,000 contos de reis).7 1 Such an amount, extremely high under any standards, was created by the Decree 885 (4/10/1856) and according to the Minister Sergio T. de Macedo: this amount has to be disbursed in three years with the transportation and establishment of immigrants. The three year deadline will expire in this coming October (...). (Relatorio do Ministro do Imperio, 1858, p. 88) In turn, each one of these companies was supposed to bring 25,000 immigrants in the next five years and grant foreigners with titles on land. In general, these companies did not bring as many immigrants as required. One should not reach the conclusion, however, that the Imperial immigration initiative failed because of the outcome from these early experiments. Instead, we observed during the 1860s, the Imperial government being actively involved in sponsoring smaller colonization companies and in enticing the provincial government with some latitude to play a more active role in screening the colonization companies. Still another approach was by giving subsidies to individual farmers to bring immigrants. This was done mainly for coffee growers and mainly those in Sao Paulo and Rio de Janeiro, especially because of the need for manpower. An important example was a farm in Sao Paulo owned by Senator Vergu.ei.ro. This politician- planter received a subsidy and brought 55 immigrants from Prussia under share contracts. In 1855, the immigrants published a manifesto complaining about the 7 1 Sergio Teixeira de Macedo, Relatorio do Ministro do Imperio, 1858, Apresentado a Assembleia Legislativana 3a. seccao da 10 legislators, p. 87-89. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 88 treatment they were experiencing on the farm.7 2 The document was disseminated widely and led Prussia and Germany in 1859 to prohibit their citizens from going to Brazil. The most serious complaint was that they could not bear the risks of the share contracts and found it hard to survive without the right to intercrop food, something that was prohibited under the contracts.7 3 Because of the continued existence of slavery and the increasingly aggressive attempts to stimulate immigration by Canada, the US, Australia and especially Argentina with its Land Law of 1868, but despite its new subsidy policy, annual immigration to Brazil remained in the 10 to 35 thousand range. The Vergueiro and other similar incidents in Brazil made matters worse by tarnishing Brazil’s reputation in Europe. Given these constraints, Brazil had to do more to attract immigrants from Portugal, Italy and Spain. In fact, it was only with the creation of the “Promotora” by the Prado’s brothers in the late 1880s that an attempt was made to separate the bad image of Brazil as a whole from a new one to be established for Sao Paulo alone. This campaign was so successful that it soon became common for foreigners to explain that they were going to Sao Paulo, not to Brazil. 7 2 Sources: Pedro Araujo d elim a, Relatorio do Ministro do Imperio de 1857, apresentado a Assembleia Geral Legislativa na 2a sessao da 10a legislators., p. 35 and Anexo B, p. 87-91. Thomas Davats (1980), Memorias de urn Colono no Brasil and Jose Vergueiro (1874), Memorial Acerca da Colonizacao e Cultivo do Cafe, Apresentado a S. Exa. O Snr. Ministro e Secretario de Estado dos Negocios da Agricultura, Campinas, p. 6-10. 7 3 The share contract was designed in order to improve the work effort of the immigrants relative to fixed wage contracts. The long gestation period in coffee production blunted this incentive and their lack of capital made the risk bearing burden onerous. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 89 As shown in Table 4.1 the flow of immigrants to Brazil after 1853 was much higher than had been experienced earlier and was fairly steady. Whereas between 1830 and 1850, only about 17 thousand immigrants had come to Brazil, between 1850 and 1880, almost 452 thousand came. Because of the ever-increasing competition for immigration, the results were not very exceptional until the late 1880s, the 1850 Land Law was nevertheless instrumental in establishing the institutional environment that made immigration policy effective. Not only was a budget for immigration and colonization regularized and the government forced to establish contacts with their foreign embassies abroad to promote immigration but also most of the immigrants who came began to receive land titles on land that had been carefully measured in accord with provisions of the 1850 land law.7 4 In general, authors like Holloway (1980), usually dismiss the immigration Empire’s immigration policy because of the small number of immigrants introduced until 1880s and also because the allegedly small budgetary commitment made to immigration. Indeed Holloway explains that his choice for 1880s (as the starting period of his study) is related to absence of a systematic immigration policy before that date. In other words, for Holloway, the small number of immigrants that arrived in Brazil between 1850 and 1889 is a consequence of the paucity of resources allocated for such an end. The amount spent with immigration, presented in table 4.1 was significant and even greater than other expenditure items (like post officers, for ;4 Notably, Brazilians were still not benefiting from registration and titling. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 90 example). According to our examination of the budgets of the Ministry of Agriculture, between 1864 and 1889, land and colonization expenses almost never ranked bellow fourth, among the expenses items listed in the annual budget for the Agriculture Ministry, as displayed in table 4.2. Table 4.2 Agriculture Ministry Annual Budget per Expense Year | 1 Subsidies to Shipping companies Public Works Land and Colonization Post Offices Other expenses Total 1864 25% 28 % 33% 7% 0.5% 7% 100% 1865 28% 30% 21% 6% 11% 3% 100% 1870 29% 25 % 20% 7% 6% 12% 100% 1875 30% 11% 25 % 11% 8% 15% 100% 1879 45% 8% 2 1 % 14% 8% 4% 100% 1885 37% 7% 22% 4% 12% 19% 100% 1889 28% 7% 20% 9% 9% 26% 100% Sources: Relatorios Anuais do Ministro da Fazenda para os anos de: 1862, p. 1-8; 1864, p. 2-7: 1865, p. 1-6: 1869, p. 1-7; 1870, p. 1-7; 1875, p. 1-8; 1878, p. 1-6; 1879, p. 1-9; 1884, p. 1-8; 1885, p. 1-4; 1888, p. 1-6. During the 1870s Brazil was moving faster toward the abolition of slavery with bills enacted to tax slave owners and to free those bom from slave mothers. These measures induced the central government to further decentralize the immigration process by giving the heretofore subservient provincial governments more power. The provincial presidents could get their assemblies to enact laws to finance the inflow of immigrants. A leading example was the Association to Aid Colonization7 5 (AAC, known as Associacao Auxiliadora de Colonizacao e Imigracao) created by the provincial president of Sao Paulo with the financial 75 Decreto n° 4-769,8 de Agosto de 1871. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 91 support of several factors and planters and having Antonio Prado as the president. The same province enacted laws in 1871 and 1872 to provide the A AC with the financial resources to bring 15,000 immigrants by 1879, an objective that was almost reached.7 6 With existing stocks of slaves, the coffee regions of Rio de Janeiro and the Paraiba Valley of Sao Paulo developed early. With sufficient slaves they did not need immigrants and the slaves served as the collateral needed to finance this long gestating crop. By contrast, as coffee production shifted to the West to Sao Paulo’s western plateau and slave prices were skyrocketing, farmers there could not afford to acquire the amount of slaves required for their coffee production. Indeed, on October 12, 1870, Jose Vergueiro7 7 wrote in the Correio Paulistano (p. 12) an article showing that with $900,000 (US dollars), a farmer could acquire 1666 immigrants from Europe or 100 slaves. Assuming similar productivity, immigrants were the cheaper alternative. This situation may have been similar to that of the northern colonies of the United States during the 18th century where Engerman (1971) argued that the colonists, being poorer than their counterparts in the South, could not afford to acquire slaves or large plantations. The northern colonies of America at that time 7 6 Lei n° 42, Piovincia de Sao Paulo 30 marco de 1872 (authorized the provincial government to grant subsidies to colonization companies to bring immigrants to the rural areas of Sao Paulo); Decreto n° 5351, 23 de Junho de 1873 (authorized the colonization agency to receive subsidies from the Provincial and the Imperial government). 7 7 Jose Vergueiro was the son of Senator Vergueiro. He was a leading coffee producer in Limeira and had a factorage house since 1856 with the Souza Aranha family . R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 92 passed laws to facilitate the purchase of land by European immigrants, mainly indentured servants. The immigration initiatives between 1871 and 1880s, faced strong opposition from the Paraiba valley representatives.7 8 In brief, they opposed granting public funds for the benefit of only one region, the Western plateau. In fact, the old region from the Valley had a stock of slaves large enough to continue their coffee production without immigrants. During this period, however, the political influence of the Western planters grew through the creation of the Paulista Republican Party. The turning point occurred during the governorship of Antonio de Quelroz Telles (1885-1887), a leading coffee producer in the West, and one of the few that also owned vast tracts of land In the Paraiba Valley. For political reasons, the Sao Paulo provincial assembly approved the Western planters demand towards the creation of a permanent immigration system, known as ‘Sociedade Promotora da Imigracao’, or “Promotora”. 7 9 4.2.1 The Impact of the Provincial Laws on the Paulista Labor M arket Having benefited from the land law (as explained above) and the decentralization of the late Empire period, Sao Paulo under the leadership of two influential planters, the Prado brothers, brought about the second and much larger wave of Immigration. As a way to overcome the negative publicity about Brazil from 7 8 In fact, the Valley also opposed the concession of profit guarantee towards the construction of railroads in the Western region, among other issues. 7 9 Sources: Martinho Prado Junior, In M emoriam, 1944; Emilia Viotti da Costa (1982) p. 172-180; Fala dirigida a Assembleia Legislative pelo presidmte da provincia de Sao Paulo Antonio de Queiroz Telles (Barao de Pamahiba), no sha 17 de Janeiro de 1887, p. 120-127. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 93 some of the earlier immigrants, Sao Paulo’s provincial president suggested the creation of an independent company to take full control of immigration services. In 1886, the Sociedade Promotora da Imigracao or ‘Promotora’ was created under the leadership of the brothers Martinico and Antonio Prado. During the 1880s the Prado brothers’ were both very active in dealing with labor and land problems of the coffee growing areas of Sao Paulo.8 0 Martinico was a politician, coffee producer, an original owner of the Mogiana railroad company, a shareholder of three banks, ‘capitalist’, founding member of the Lavoura club and a leading voice in the creation of the Paulista Republican Party.8 1 His older brother, Antonio, had similar activities but he was primarily involved in politics at the Empire instead of provincial level. Martinico was crucial to the success of the Promotora in that he had researched abroad the market for immigrants and thereby could identify a set of incentives that could succeed in attracting immigrants. The ‘Promotora’s Board of Directors was composed of coffee producers from Western Sao Paulo who were already using immigrants on their farms. In contrast to what had happened in the first immigration stage with its many colonization companies, the ‘Promotora’ centralized all activities regarding immigration. The private colonization companies were closed in Sao Paulo. In its 8 0 For example, Antonio, as the minister of Agriculture, introduced a proposal for changing the 1850 land law that was later used as the blueprint for the 1895 Sao Paulo land law’. Martinico, in turn, passed bills to tax slave owners and to increase funds for immigration. He also lobbied for the creation of more railroads for the hinterlands of Sao Paulo. 8 1 The main source we used for the “Promotora’' and for the Prado brothers is: In Memoriam Martinho Prado Junior, 1944. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 94 first three years of operation, the ‘Promotora’ brought 133,470 immigrants to Sao Paulo, three times the number that had come between 1849 and 1885. The provincial budget allocated to immigration increased from $20,000 during the 1870s to $250,000 per year.8 2 It created permanent offices in Genoa and Lisbon and recruiters were sent to the farming regions of Italy, Portugal and Spain to distribute brochures containing information about Sao Paulo and employment opportunities on the farms. These brochures ensured potential migrants about free transportation and accommodation in newly built hostels on arrival and free transportation all the way to the farms. With respect to land, immigrants would have to pay only the administrative fees to receive titles to their land. Immigrants were sent almost exclusively to the coffee municipalities of Sao Paulo’s western plateau. The 1850 land law was still relevant in that the Bureau of Public land started to build official settlements in coffee-growing regions of Sao Paulo.8 3 A crucial function of the Promotora was in providing continuity in the immigration program through the period of reorganization from the late years of the Empire to the first ones of the Republic. The buildup of Sao Paulo’s immigration program quite conveniently coincided with the decline of slavery. Indeed, so many farms had switched to exclusive use of free workers in Western Sao Paulo that the 1888 coffee 8 2 Relatorio da Seeretaria da Agricaltara, 1893, Anexo 2, p. 37; Lucy Maffei Butter, “Imigracao Italians em Sao Paulo, 1880-1889” pp. 69-70; Adeline Riccardi, “Pamaiba, o Pioneiro da imigracao.”, p. 147. 8 3 In fact 10 o f the 14 official settlements were built by the Bureau of Public Lands between 1885 and 1889. Source: Fala do presidente da provincia da Sao Paulo Francisco de Paula Rodrigues Alves, apresentado a Assembleia Legislativa em 10 de Janeiro de 1888, p. 31-34. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 95 crop, harvested in the months immediately after the abolition law was enacted, was larger than that of the preceding year. By this time also, coffee production in the Western plateau had surpassed that of the Paraiba Valley. 4.3 The Impacts of the 1850 Land Law la the Land M arket Regarding the landownership situation, few Brazilians received title on their lands. In the whole country, a total of 448 properties (land grants and posses) received a title, between 1855 and 188684, according to the annual reports of the imperial and agriculture ministry. Table 4.3 Number and Area of Private Properties Legalized by the 1850 Land Law Provinces Number of Measured 1920 Total Measured private Area by the Area 0 area as % properties 1850 law of total area with a title3 (B as % C) O n Hectares) (in Hectares) A B C D Ceara 12 1.311.16 14,859,100 0.01% Bahia 5 1,429.33 52,937,900 0.00% Minas Gerais 2 8,774.59 59,381,000 0.01% Sao Paufo 47 20,064.43 24,723,900 0.08% Parana 89 156,636.22 19,989,700 0.78% Sta Catarina 132 156,979.87 9,499,800 1.65% Espirito Santo 161 32,096.66 4,468,400 0.72% Total 448 377,292.26 185,859,800 0.20% (a) Private properties with a title ({1850-1889). (b) This is the total area reported in the 1920 Brazilian Census. Sources: 1864 Agriculture Ministry Annual Report, Annex A-X-N6; 1886 Agriculture Ministry Annual Report, Annex B-D-G3; 1920 Brazilian Census, vol. 3, p. 5. 8 4 Source: Relatorio de 1864, MMsterio da A gricultea. p. 29-50, Anexo X-N6. In: Relatorio do Ministro daAgriculturajtntonio Francisco de Paula Souza para oAnno de 1864 apresentado a Assembleia Legislatives rta 4a. Sessao da 12a. Legislature. Rio de Janeiro: Typografia Perseveranca. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 96 If data in table 4.3 were the criterion for evaluating the 1850 land law, it is clear that the law was a complete failure. However, the question that still remains is: why claimants did not use the 1850 land law to their advantage by claiming title to their lands? In our view, there are two related explanations. The first has to do with the contents of the law. As previously explained, the procedures to obtain a title on the land were different from those established for the ‘parish priest’s registration’. The latter did not grant titles, but at a time where communications were difficult and the majority of the free population illiterate, priests were a powerful tool to announce major changes in the provinces. Hence, one explanation as to why the law failed to increase private property rights may be due to the fact that claimants assumed that the registration with the priests was the required proof of ownership. Table 4.4 Number of Parish Priest Registrations Provinces Number of parish priest registrations Provinces Number of parish priest registrations Alagoas 11,441 Paraiba 21,310 Amazonas 2,722 Parana 12,203 Bahia natPemambuco na Ceara 31,842IPiaui 21,259 Espirito Santo 4,480 Rio de Janeiro (capital) 694 Goyas 7,361 Rio Grande do Norte na Maranhao 10,730 S. Pedro Rio Grande do Sul 19,380 Mato Grosso na Sao Paulo 38,979 Minas Gerais 74,294 S ergipe 12,725 Para 19,320 Sta Catarina 21,718 Total Brazil 162,190 Sources: Relatorio Annua! do Ministro da Agriculture para 186Q, Anexo D, p. 2-76 and Relatorio Annual do Ministro da Agriculture para 1864, Anexo D, p. 1-49. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 97 According to the Ministers of Agriculture8 5 , the two provinces that finished the parish priest registration were: Sao Paulo and Santa Catarina. In other provinces, like Minas Gerais the registration books were Incomplete because some priests did not send the books with the registrars and/or incorrect because, according to the same Ministers, some people registered their properties with more than one parish. We did not find any evidence to support the idea that the parish from certain provinces were trying to block the registration process. In fact, as previously explained the ‘parish priest’ did not grant the claimant with a title on the land. The idea was to generate a map of all the private properties In Brazil. As we argue In the next chapter, the 1895 land law was first presented by Antonio Prado, as the Minister of Agriculture in 1886.8 6 Mr. Prado, a Paulista, was proposing a change in the 1850 Land Law. His most innovative idea was to allow claimants to receive a title on their lands, upon the condition that they had a ‘parish priest registration’. Though it was rejected In 1886, it was adopted by Sao Paulo in 1895. The second explanation for the failure of Brazilians to obtain titles to their land has to do with the autonomy granted to the provincial president in the measurement of private lands. The president, in turn, appointed the ‘comissario judge’, who was 8 5 Sources: Relatorio de 1865, Mmisterio da Agricuitara. p. 29-50. la: Relatorio do Ministro da Agricultura Antonio Francisco de Paula Souza para o Anno de 1865 apresentado aAssembleia Legislativa na 4a. Sessao da 12a. Legislatura. Rio de Janeiro: Typografia Perseveranca; Relatorio de 1871, Ministro da Agricuitura Anexo B, p. 1-21, Anexo D, p. 1-64. In: Relatorio do Ministro da Agricuitara, Candida BorgesMonteiro para o Anno de 1871 apresentado aAssembleia Legislativa na 4a. Sessao da 14a. Legislatura. Rio de Janeiro: Typografia Universal de E & H. Laemmert. 8 6 Source: Relatorio do Ministro da Agricuitura Antonio da Silva Prado para o Anno de 1885 apresentado aAssembleia Legislativa na l a . Sessao da 2(f. Legislatura, 1886. Anexo A-I, (Inspetoria Geral de Terras e Colonizacao under the supervision of the Francisco de Banos e Acciolli de Vasconcellos) p. 1-27. Rio de Janeiro: Imprensa National. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 98 then in charge of the whole process. The ‘judge’, however, was not a lawyer or a magistrate and was especially created by the 1850 land law. According to two Agriculture Ministers8 7 , the ‘judges’ were the largest landowners in their respective districts.8 8 Landowners, in turn, had strong informal power over the population because they usually increased the scarce provincial budgets with their own funds. Even if private claimants wanted to initiate the process, they had to request formal authorization from the ‘ judge’/landowner, according to the land law. In brief, this figure was in fact, more powerful than the provincial president and centralized the whole private titling process. In a time where land was a source of power and the large landholdings were the dominant, the incentives to formalize the land ownership 89 situation were very low. The above scenario started to change with the introduction of immigrants. In the regions suffering from a shortage of labor, like in the western plateau of Sao Paulo, landowners realized that one way to reduce immigrants’ mobility was to make credible promises regarding titles to land. Hence, it was under the landowners’ interests to inform the Bureau of Public Land, or the land and colonization offices, of 8 7 Source: Relatorio de 1865, Mimsterio da Agricuitura. p. 29-50. In: Relatorio do Ministro da AgriculturaAntonio Francisco de Paula Souza para o Anno de 1865 apresentado aAssembleia Legislativa na 4a. Sessao da 12a. Legislatura. Rio de Janeiro. Typografia Perseveranca; Relatorio de 1871, Ministro da Agricuitura, p. 1-21, Anexo D, p. 1-64, In: Relatorio do Ministro da Agricuitura, Candida Borges Monteiro para o Anno de 1871 apresentado aAssembleia Legislativa na 4a. Sessao da 14a. Legislatura. Rio de Janeiro: Typografia Universal de E & H. Laemmert. 8 8 Leal (1949) explains that the large fanners, from the imperial period, became the ‘coroneis’ during the Old Republic. 8 9 Source: Relatorio de 1864, Miaisterio da Agricuitura. p. 84-99, Anexo X, p. 2-25. In: Relatorio do Ministro da Agricuitura, Jesuino Marcondez de Oliveira e Sa, para o Anno de 1864 apresentado a Assembkia Legislativa na 3a. Sessao da 12a. Legislatura. Rio de Janeiro: Typografia Nacional. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 99 the location of public lands. This is why the Imperial government succeeded in the measurement of public land, even though the private land situation remained virtually unchanged. In fact, according to table 4.5 the amount of measured public land was significantly greater than private land, especially considering that more than 14 was granted to colonization companies. Table 4.5 Public Land Measured in 1885 Provinces 1885 Measured Public3 1920 Total Area a 1920 Rural area3 1885 Measured Public Land as a % of Total area Rural area Espirito Santo 184,767 44,468,400 1,279,6991 0.42% 14.44% Sta Catarina 136,640 9,499,800 3,567,7571 1.44% 3.83% Parana 182,617 19,989,700 5,302,709) 0.91% 3.44% Rio Grande do Sul 205,364 28,528,900 18,578,923 0.72% 1.11% Alagoas 101,070 2,857,100 1,348,241 3.54% 7.50% Para 202,139 136,296,600 9,830,280 0.15% 2.06% Sao Pauio 252,674 24,723,900) 13,883,269 1.02% 1.82% Minas G erais 193,136 59,381,000 27,390,536 0.33% 0.71% Total 1,458,407 325,745,400 248,391,414 0.45% 0.59% Note: (a) All areas are expressed in hectares. Sources: Relatorio do Ministerio da Agricuitura para 1885, Anexo I, p. 1-27; Censo Agricola de 1920 for total and rural areas. During the Empire, it seems clear that immigrants acquired more titles than Brazilians. As explored in the next two chapters, the immigration program was preserved by Sao Paulo during the Republic. In turn, to preserve the high immigration inflow, landowners/colonels/judges started to enforce the land laws. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 1 0 0 Therefore, we observe in Sao Paulo an overall improvement in. the pattern of landownership: more titles became available to both - Brazilians and immigrants. While Sao Paulo and Minas Gerais started with similar land tenure situation during the Empire, the continuation of the Paulista immigration process during the Old Republic, and the termination of the same program in Minas Gerais, explains why Sao Paulo evolved towards a well-defined land rights system while Minas did not change much. The fact that Sao Paulo completed the “parish priest registration” while Minas Gerais did not has no relationship with the land tenure system in the two provinces during the Empire. We did not find any documents to support the idea that Sao Paulo had a superior pattern of landownership than Minas during the Empire.9 0 Indeed, the parish priest became a relevant issue in Sao Paulo only because it was used in the 1895 as a proof of ownership, 4.4 The Impact of the 1850 Land Law in the Credit M arket The 1850 land law produced two major impacts on the credit market. The least successful one was the creation of mortgage banks, in Rio de Janeiro and in Sao Paulo, that were fostered by the 1864 and the 1885 mortgage laws. The idea was to induce the creation of long-term credit by using land as a collateral. Even with the abolition of the ‘forced adjudication’9 1 in the 1885 law, land was hardly accepted as collateral. This is so because the land registry and the commercial registry were two 9 0 In other words, Sao Paolo m d Minas had similar landownership patterns dining the Empire. One should not extend M s conclusion to all Brazilian provinces mainly because the southern regions had a much more definite set o f land lights than both Sao Paulo and M ims, even during the Empire. 9 1 Under forced adjudication, the creditor that wants to foreclose a mortgage, has to accepts the results of the first auction, even if the maximum bid fails to match the amount of the original loan. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 10 1 separate entities that, in turn, enabled landowners to mortgage the same land more than once. It is only after 1921, with the creation of the ‘Torrens system of registration.’ in Sao Paulo that unified the two registries that we observe a surge in the creation of mortgage banks. The second impact of the 1850 law was the increase in money demand Induced by the rise in Immigration. While factors provided the bulk o f coffee farmers’ credit needs until 1850, the greater demand for credit induced the creation of more formal lines of credit. Rio de Janeiro, as early as 1854 already had a considerably well- developed banking system. In Rio, very few farmers became factors or were associated with commercial banks92. In other words, Rio coffee farmers did not (need to) create close-knit relationships with the formal credit system. The increase in money demand led to profound changes in Sao Paulo. The Paulista banking system until 1871 was a mere extension of the Rio banks and as such, insufficient, to meet the requirements of an increase in immigration coupled with rising coffee production in the western plateau. Starting in 1872, we observe that Paulista coffee farmers and factors amplified their close-knit relationships. Not only did we find the same names (factors and coffee farmers) in the board of 9 2 The leading positions in commercial banks were: officers (president, vice president, secretary) and directors (board of directors, board of auditors). Between 1854 and 1889, we used newspapers and Almanacs, to research the former branch of business the commercial banks officers and directors were associated. We then found that out of the 19 commercial banks that existed in Rio de Janeiro between 1854 and 1889, there were 70 factors and only 6 coffee farmers. In contrast, in Sao Paulo, we found 29 coffee producers and 34 factors. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 1 0 2 directors of newly created commercial banks but we also found them, in the same period, creating new factorage houses. According to Hanley (1995), during the 1870s, we observed in Sao Paulo a decline in discounting9 3 and an increase in the formal lines of credit (known as ‘guaranteed lines of credit1 ). Usually, this type of credit was granted to companies or large investors and required extremely liquid collateral (e.g., diamonds or government bonds). As a way to preserve the supply of credit to coffee farmers, the newly created factorage houses started to guarantee farmers’ loans, by taking (or sharing) the risks with the farmers. In other words, coffee farmers and factors, as the board members of commercial banks, had a certain amount of discretion to select the main creditors of the bank. Because they had to act under the rules, one way to profit from being on the board of directors was to grant credit to new factorage companies, that would bear the liabilities of a third party, in case of default, but would also foster coffee production. However, judging by the fact that most of these banks survived two financial crisis (1891 and the 1930) and that the credit to coffee farmers through factorage firms remained active until 1930, coffee farmers’ default rate was probably low. Factorage firms were more flexible than commercial banks, were not chartered by the government, and hence had more autonomy to screen applicants for credit. 9 3 Discounting was the practice where farmers signed different bills o f exchange {promissory notes, planters’ draft, and merchants credits) to obtain credit through their factors. The bills were legal obligations for all parties involved in their acceptance, payment and transference. The factor that first received the bill would endorse and transfer the letter to any other party. The holder of the bill would typically sell it to another party' or a bank at a ‘ discount’. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 103 We mentioned before that Rio de Janeiro had the largest immigrant population in 1872, while Sao Paulo was in fifth place. The initiative of the “Promotora” was extremely successful because Sao Paulo, in 1886 had the required infrastructure to receive immigrants. In other words, besides commercial banks, paulista coffee producers also created four railroads between 1872 and 1889, to link the capital of Sao Paulo with the hinterlands. The same coffee producers on the board of commercial banks, owned factorage firms and were on the board of directors of these railroads. Besides the commercial banks and factorage houses, the ‘coffee railroads’ also made the western plateau accessible for foreigners that in turn, induced the coffee boom that made Sao Paulo the world largest coffee producing state during the Old Republic. Until 1867, the Tnglesa’9 4 , linking Santos to Jundiai, was the only railroad in Sao Paulo. Jundiai, however, was only barely into the coffee growing region of Sao Paulo. At that time, one of the Prado brothers, Antonio and some of his relatives (Queiroz Telles and Souza Prado) pledged some shares in a new company that would extend this line into the coffee growing area of Campinas and beyond.9 3 In 1872, the ‘Paulista’ railroad opened its services to link Jundiai to Campinas. While all the previous railroads in Brazil had been financed by British and other foreign investors, the Paulista railroad was essentially entirely Brazilian financed and without all the 9 4 The colloquial name stems from the fact that the engineers, construction, management and financing were English. “ Sao Paulo railway” was the official name. 9 3 In: Odilon Nogueira de Matos (1981), Cafe e Ferrovias, p. 64-79. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 104 guarantees required for foreign-fmanced lines. To raise additional capital locally, commissioners were selected to sell shares throughout the western coffee region of Sao Paulo. In 1872, Martinico, the younger of the Prado brothers, obtained the authorization to build the Mogiana line from Campinas to the hinterlands (Ribeirao Preto, Casa Branca) where it linked with the Paulista line. The Mogiana was the first railroad to reach Minas Gerais in 1890. After obtaining the concession, the board of directors (Souza Aranha, QueirozTelles, Paes de Barros, Arruda Botelho, Prado) started to sell the shares to other farmers from the Western plateau, where the railroad was supposed to serve. It became clear that to have the line closer to the farm, the planter had to be a shareholder. If all coffee growers were in the same area, this would not have been necessary, allowing growers to get away with free riding knowing that some, perhaps the largest grower would act on their behalf. But, since the landowners interested in the railroad were from many different locations and the railroad could only go through or near some of them, it gave maximum incentive to participate. When one railroad would take a negative decision on a certain route close to one set of landowners’ properties, these would try start another line, perhaps as simply a feeder line to the main line.9 6 During the entire period under study, railroads received different types of concessions and subsidies from the government. The lines built in Sao Paulo until 1889, received from the Imperial government a 5% profit guarantee - composed by 9 6 This is a nice application of a rather neglected one of Olson's group characteristics deemed favorable to collective action, namely “heterogeneityr in goals”. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 105 interest and amortization, guarantees - essentially assuring a minimum 5% rate of return. The provincial government offered 2% interest on top of the 5% to attract the companies.9 7 Among the incentives offered to such investors were monopoly rights for the railroad within a specified distance from the tracks (typically 30 kilometers), duty-free imports of capital and intermediate goods. In Sao Paulo, railroads were privately financed by paulista coffee producers through issuance of shares, as a way to raise capital. According to Hanley (1995), railroad guarantees did not necessarily translate into easy access to capital. Without a stock market, these companies had to use the commercial banking system every time they decided to raise their capital. 4.5 Land Rights, Immigrants and Coffee: from Rio to Sao Paulo in 1886 Coffee production increased 200% between 1854 and 1886, with Rio de Janeiro explaining 55% of such rise and Sao Paulo 45%. Rio coffee lands were older than Sao Paulo and with the 1888 slave abolition most farmers went bankrupt, due to their inability to compete with a new zone based on free labor that was booming: the Western plateau. 9 7 Flavio Azevedo Marques Saes, A s terrovias de Sao Paulo, 1870-1940, ch. 1, p. 37-69. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 106 Table 4.6 Coffee Production and Population In Sao Paulo and Rio de Janeiro: 1886 Zones of Sa© P a u lo 3 J 1886 Coffee Province and Rio d e Jan eiro 1 P roduction 1888 P opulate 30. p arrobasb % of Total Total % Brazi!iansj% Immigrants % Slaves Capital (1s t) - - 74,895 82% 17% 1% Paraiba valley (2nd) 2,117,134 7% 335,022 90% 1% 9% Sorocaba (3r d ) 1,198,983 4% 51,446 82% 2% 15% Central (4t h ) 3,446,888 12% 154,337 82% 2% 15% Mogiana(5ft) 2,366,599 8% 178,795 86% 2% 12% Paulista (6th ) 2,458,131 9% 133,697 81% 6% 13% Araraquarense (7ft) 633,896 2% 33,151 94% 0.0% 6% Noroeste (8t h ) - - - - - - Alta Sorocabana (9*) - - 71,903 95% 2% 3% Baixa Sorocabana (109 1 ) - - 54,805 96% 1% 3% Southern Coast (11th ) - - 42,430 97% 1% 2% Total SaoPau1o(1’t-11t b zone) 12,221,610 42% 1,130,480 87% 3% 9% Paraiba vaitey (2n d ) 2,117,134 7% 335,022 90% 1% 9% Western Pfateau (4*-9») 8,905,514 31% 571,883 85% 3% 12% Rio d e Janeiro 16,586,471 58% 1,357,366 81% 7% 12% Total Sao Paul© and Rio 28,808,081 100% 2,487,846 84% 5% 11% Note: (a) For more information on the Sao Paulo zones, please refer to Appendix 1. (b) One arroba equals 14.40 kg or 31.7 pounds. Sources: Rio coffee Production adopted from Anuario Estatistico de 1937, Institute do Cafe do Estado de Sao Paulo, p. 64. Sao Paulo coffee production from Camargo (1954), vol. 2, p. 62. For Sao Paulo population: Camargo (1954), vol. 2, p. 2-12. For Rio de Janeiro population: adopted from the 1890 Census of Brazil. The Rio de Janeiro slave population is taken from the 1887 Annual Report from the Rio de Janeiro Province, Anexo 1, Mapa SN, Quadra Estatistico dos Escravos Existentes na Provincia do Rio de Janeiro e Matriculados em Virtude da Lei 3270 de 1875. Even before the Republic, the Western Plateau emerged as the leading coffee region in Sao Paulo; the Paraiba Valley ranked second in 1890 and last in 1930. Without the 1850 land law, few immigrants would have come to Brazil and thus, a shortage of labor would have emerged in 1888 with the complete abolition of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 107 slavery. Imperial government’s Initiative, coupled with the “Promotora”, fostered immigration at a time when slavery was being completely abolished. Table 4.7 Coffee Production in Sao Paulo and Rio de Janeiro, 1836-1886 Sao Paulo major zones and Co 'fee Production fin Arrobas)3 Rio de Janeiro 1838 % of Total 1854 % of Total | 1886 % of T otal Paraiba valley (2n d ) 479,496 1 7 % 2,737,639 28% 2,117,134 7 % Western Plateau ) 58,454 2 % 709,792 7% 8,905,514 31% Total Sao Paulo(tst-11a ,zone) 556,739 1 9 % 3,578,755 37% 12,221,610 42% Total Rio de Janeiro 2,321,710 81% 6,038,992 63% 16,586,471 58% Total Sao Pauio and Rio 2,878,449 100% 9,617,747 100% 28,808,081 100% Notes: (a) O ne arroba equals 14.4kg or 31,7 pounds. Sources: for 1836 refer to table 3.1 and for 1886 refer table 4.6. For 1854: Rio de Janeiro coffee production is from 1874 Annual report of the provincial president of Rio de Janeiro, mapa 19. Sao Paulo coffee production is from Camargo (1954), vol. 2, p. 62. In table 4.7 we notice that the increase coffee production in the Western Plateau (from 2% in 1836 to 31% in 1886) offsets the relative decrease in Rio de Janeiro coffee production. The Paraiba Valley, as extention of Rio coffee production, also registered a decline, especially after 1854. The 1,000% increase in Brazilian coffee production, between 1836 and 1886, is almost evenly explained by Rio de Janeiro (55%) and Sao Paulo (45%). Whereas in 1836, Rio de Janeiro responded for more 3 A of Brazil total coffee production, its gradual decline did not affect the overall performance of Brazil mainly because the Western Plateau emerged as the single most important zone of coffee production, as early as 1854. In 1886, it responded for 35% of the total Brazilian coffee production and in 1905, according to Ulker, the Sao R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 108 Paulo hinterlands became the single most important cluster of coffee production in the world. Immigration and the abolition of slavery were closely connected to the demise of the Empire. Despite Sao Paulo's increasingly economic importance after 1870, the Imperial government did very little, in terms of public works, for Sao Paulo. From railroad building, to immigration, to the improvements in the Santos harbor, and to credit and banking, small groups of planters were the leading force behind all these initiatives. The absence of political support from the central government for so many years led this group to voice their demands against the mainstream order by creating in 1870 their own political party: the Paulista Republican Party (‘Partido Republicano Paulista,or PRP’). 4.6 The Role of Sao Paulo and Immigrants in the Creation of a Republic Paulista leadership at the federal level began simultaneously with the creation of Sao Paulo’s Republican Party. No other provincial Republican organization could match the experience of the Paulista Republican Party (PRP) in the last two decades of the Empire. The party, created in 1873 mainly by farmers from the West of Sao Paulo, defended federalism, provincial autonomy in politics, provincial control of banking and immigration policies, and the decentralization of tax revenues. In fact, when the Paulistas organized a Paulista Republican Party in 1873, they emphasized that the new regime would serve Sao Paulo. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 109 Paulistas of various political persuasions had chafed at what they considered neglect of the province by the Imperial government. Sao Paulo entered its classic export phase with the completion of the Santos-Jundiai railway in 1867, but revenues in 1870 were not sufficient to meet the provincial government’s responsibilities for road construction, public health and education.9 8 Despite the lack of passable roads and other public works, Sao Paulo was one of three provinces that had never received direct financial aid under the Empire.9 9 In 1886-1887, Sao Paulo contributed eight times as much to the central treasury as it received back in outlays. Politically, the province was unable to remedy this state of affairs, for it was clearly underrepresented in the imperial parliament by the 1880s.1 0 0 The Republicans of Sao Paulo called for a distribution of revenues that would allow the province to meet the requirements of the expanding export economy, and for political autonomy to maximize Sao Paulo’s economic potential.1 0 1 One feature of the PRP distinguishes it from its counterparts: separatism, the abolition of slaves and even the substitution of a republic for the monarchy. Regarding the slave issue, though the Paulista Republicans had rejected abolition in a conclave in 1872, they skirted the Issue at the party’s organizing congress the 9 8 Howard Marcus (1973), Provincial Government in Sao Paulo: the administration ofJoao Teodoro Xavier, p. 28, 92 and 94. 9 9 Oliveira Torres (1964). p. 354. The other two provinces were Rio Grande do Sul and Rio de Janeiro, both of which had significant republicans movements. 1 0 0 Alfred Marc (1890), Le Brazil, p. 178. 1 0 1 Aureliano Tavares Bastos (1870), p. 355; Tavares Bastos (1889) rt Provincia de Sao Paulo, 3 de inarco de 1889, p.l R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 110 following year at Itu (where slave owning planters predominated). 1 0 2 Slavery was declared to be a ‘social issue’ that had to be solved by the ‘whole nation’, but on a province by province basis. The point that was clear in Itu was that slave-owners would be compensated for financial losses. One vocal abolitionist, Luis Gama, left the party, though another, Bernardino de Campos, remained. 1 0 3 For the Republicans, as for the other Paulista politicians, the abolition issue was indissolubly linked with the immigration question. In 1885, Prudente de Morais, Brazil’s president from 1894 to 1898, emphasized in a speech in the imperial parliament that Paulista planters of all political hues would not abandon slavery without an alternate source of cheap labor.1 0 4 On the immigration issue, Republicans were closely allied with western planters of the Conservative Party. Indeed they were more than closely allied as in the case of the two of the Prado’s brothers: one, Martinico, was the chief Republican spokesman on the issue and a founder of the ‘Promotora’; the other, Antonio, was a leader of the province’s Conservative Party. Among Republican groups in Brazil, Paulistas had strong support In their province in contrast to other provinces where even in the late 1870’s and the 1880’s, Republicans were largely ignored. The PRP was rooted in the richest agricultural area of Brazil, the Central zone of Sao Paulo, and its adherents included some of the 1 0 2 George Boehever (ad), Da Monarquia a Republica, p. 265. 1 0 3 George Boeheier (nd), Da Monarquia a Republica, p. 268. 1 0 4 Jose Maria dos Santos (1942), OsRepublicanosPaulistaseaAbolicao, p. 225. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. I l l province’s most prominent planters. In 1877, three Republicans won seats in the 36 representative provincial assembly, the first republican victory an yw h ere in Brazil. As the Republican Party matured in the final years of the Empire, its major problem remained the internal tension over abolition. While the western planters privately defended slave abolition it faced serious opposition from the Paraiba valley group. The final crisis came in 1887, when the central zone and its fringes in the west witnessed repeated slave uprisings while the rest of the province remained quiet1(b. Since the disorder and violence interfered with immigration,1 0 6 such disturbances hastened the collapse of slavery in the Central zone in Sao Paulo, and in Brazil as a whole. In March 1887, the Sao Paulo assembly, accepted the proposal drafted by Martinico Prado and voted a $200 tax on all slaves in the province. Meanwhile, the immigration into the west was succeeding brilliantly, and by May some 60,000 Italian immigrants had been placed on Sao Paulo coffee farms. In September 1887, planters of all parties in Campinas, promised their slaves liberty provided they would continue to work for their masters until the end of the 1890s. The death sentence of slavery In Sao Paulo was read at the founding of the Emancipation and Labor Organization Society In December 1887, under the presidency of Marques de Tres Rios, from Campinas. In the event, the province’s most powerful planters set December 1890 as a deadline for slave abolition in all Sao 1 0 : 1 Robert Toplin (1972), The Abolition o f Slavery in Brazil, p. 211, names six counties that experienced revolts, all in the West. On the politics of abolition in Sao Paulo see also Conrad (1972), ch. 16; Lvsz (1948); Hall (1969), Holloway (1980), Viotti d a . Costa (1982) and Beiguelman (1968) 1 0 6 Robert Toplm(1972), The Abolition o f Slavery in Brazil, p. 219. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 1 1 2 Paulo. After 1887, the provincial police refused to help planters capture runaways, and total abolition had almost been achieved in the western counties by January 1888 1 0 7 , four months before the golden law freed all slaves. Antonio Prado played a critical role as Minister of Agriculture in bringing about nationwide abolition and equally well established is his interest in the immigration program, the central issue for the planters of the west. Sao Paulo took out its only foreign loan during the Empire ($1,500,000 in 1888) explicitly to subsidize immigration.1 0 8 Before abolition in May 1888, political leaders throughout the province had apparently been won over, since the assembly unanimously passed legislation providing an inflow of 100,000 immigrants.1 0 9 Republicans, it is widely assumed, if not proven, profited politically by abolition, as disgruntled planters apparently turned away from the imperial parties that passed abolition without indemnification in Parliament. Republicans were ‘blameless’ since none of them had been elected for that section. The end of slavery and the success of the immigration program accelerated a trend toward political convergence in Sao Paulo. .In 1889, when the Empire finally came to an end, Sao Paulo was the only state in the whole federation with strong political parties, where the republican side was strong. The PRP played a significant 1 0 7 Nicea Vilela Luz(l948), “A Adramistacao Provincial de Sao Panto em face ao Movimento Abolitionista”, p. 96-98. 1 0 8 Peter Eisenberg m d Michael Hall (1973), “ Labor Supply and Immigration in Brazil: A comparison o f Pernambuco and Sao Paulo”, p. 12. 1 0 9 Joao Camdo Oliveira Carvalho (1888), A Provincial de Sao Paulo em 1888: Ensaio Historico Politico. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 113 role in the overthrow of the Empire, though the coup that terminated it was essentially a military operation. Indeed, the Pauli stas were the only group outside Rio de Janeiro to participate.1 1 0 In the wake of the Republic, Sao Paulo emerged as the only state of the federation with, a strong, coherent and homogeneous political party, the PRP. While it is true that there was no competition against the PRP, the absence of political competition was not necessarily bad for Sao Paulo. The political elite, during the republic, preserved the immigration Initiative, that in turn, contributed to a decrease in the size of landholdings and improvement in the private property rights system. 4.8 Conclusion The immigration initiative started during the Empire, and not during the Republic, as claimed by most of the literature. Indeed, in this period the government created the institutional basis for attracting immigrants. Specifically, by granting free land with the 1850 land law; by offering subsidized transportation and by recruiting in Europe rural workers. The 1850 land law was a forward-looking policy created to avoid a shortage of labor on the coffee farms. In 1850, the Imperial government knew that without an alternative source of labor to substitute for slaves, the export- based economy would be in danger and would probably follow the path of Haiti, a 1 1 0 Manuel Fenaz Campos Salles, (1908), Da Propaganda a Presidencia, p. 43-44; .Antonio Assis Cintra (1953). “O PRP na primeira campanha Presidential da Republica”. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 114 large coffee producing country that went into serious economic problems due to the abolition of slavery. In Sao Paulo, the 1850 land law produced stronger impacts In the land, labor and credit market than elsewhere because of the coffee boom in the western plateau. Fostered by the Imperial government immigration initiative, the Paulista provincial government and the Prado brothers organized the “Promotora” to Increase the inflow of immigrants to Sao Paulo. The Promotora was a success because the 1850 land law produced strong linkages between the land, credit and transportation markets. The close-knit relationship between coffee farmers and factors was intensified during the 1880s and led to the creation of commercial banks that ensured coffee would also have credit and the railroads to transport both coffee and Immigrants to the hinterland. While it seems clear that coffee producers were a homogeneous pressure group whose actions were translated into projects during the Empire, their political role was important in the overthrow of the Empire. It is Interesting to note that, while laws are important institutions for any country, informal arrangements are sometimes a pre-condition for the success of laws that intend to benefit the majority of the population, as was the case with the 1850 land law and the improvement in private property rights. The political elite did not block the titling process from immigrants mainly because they knew that the benefits they would receive from the having surplus labor in the coffee economy was greater than the costs of granting a piece of land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 115 Finally, the original theory of property rights should be amended so as to be consistent with the Brazilian experience, especially, during the coffee boom. Instead of an overly simplified model wherein an increase in product or land prices Increases the demand for property rights, changes the legislation and improves the land rights system, additional political economy factors and external competitive conditions should be included. In developing countries, the rule of law is not as strong as it is in the developed countries. However, one should not reach the simplistic conclusion that the result is necessarily a lack of improvement in property rights. An increase in coffee prices could quite possibly lead to increasing concentration of landholdings or even decline in the coffee economy. As we hope to illustrate In our next essay, private property rights improved in Sao Paulo because immigrants produced positive externalities for the political, land and labor markets. The informal and formal institutions worked together to enforce and enhance the credibility of the laws. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 116 CHAPTER 5: THE DETERMINANTS OF THE LAND AND LABOR LAWS IN SAO PAULO DURING THE OLD REPUBLIC (1890-1930) In 1889, Brazil was proclaimed a republic and its 1891 constitution gave the states autonomy over many issues that were previously reserved for the Imperial government. In the land market, the major change introduced by the 1891 constitution was the transference of jurisdiction over land from the central government to the states. The 1850 land law, however, remained in effect in the portions of the Brazilian territory where the union retained ownership. In particular, the union preserved under its domain only land in the frontier and national security zones. While Sao Paulo decided to preserve the immigration program in place since 1886, the two other coffee states, Rio de Janeiro and Minas Gerais, discontinued theirs. In this regard, Paulista coffee producers had more influence on the state politics than the coffee planters from Minas or Rio.1 1 1 During this period, the Paulista coffee producers started to display features of a pressure group using state power to protect their interests and influence the federal government. While we do not dismiss the political influence of this group, the literature derives the conclusion that most of the institutions created during this period were enacted to benefit the coffee producers’ interests at the expense of the 1 1 1 In Sao Paulo, the economic dominance of coffee induced producers to have a common and strong interest: defend and foster coffee production. In Minas Gerais and Rio de Janeiro, coffee responded for a small share of their production, hence producers’ demands were more heterogeneous. In turn, the political scenario was more fragmented than the one in Sao Paulo. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 117 whole society/1 2 In particular, the conclusion has several dimensions. First, immigrants were believed to be mere substitutes for slaves in the sense that the immigrants had to work as hard as slaves and were monitored similarly (contracts not being respected) and the coffee fields had infrastructure that was too poor and unsuitable for free labor. Second, in a country where the status quo blocked laws that benefited the majority of the population, the coffee boom in Sao Paulo was not seen as producing any significant improvement in property rights or even any decrease in the size of landholdings with latifundia remaining dominant. Third, any immigrants that became landowners were seen as a small minority. Fourth, it was not believed that the state had ever implemented a comprehensive colonization policy during this period to foster an increase in foreign landowner ship. Hence during the Republican period, coffee was seen as produced on latifundios owned almost entirely by Brazilians. In brief, the monopoly over land enabled Brazilians to exercise monopsony power over the labor market, keeping colonos’ wage rates at very low levels. Given the above scenario, the literature concludes that the laws enacted by Sao Paulo regarding landownership and even those concerning labor market regulations were either not enforced or did not produce any significant institutional change. If this were true, then immigrants were irrational (to become semi-slaves) in choosing 1 1 2 H ie most relevant names that defend this positon are: Stockc (1986), Martins (1973), Hall (1969), Dean (1976a), Trazzi (1985). To a certain degree we can also inclnde Prado Junior (1979). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 118 to go to Sao Paulo, knowing that they would be better off in Argentina or elsewhere where free transportation was offered. To refute the above claims our two main goals in this chapter are: (1) to provide an overview of the often dismissed institutional changes promoted by the state of Sao Paulo in the labor and land markets; and (2) to indicate the economic and political short and long term determinants of the laws enacted in the land and labor markets. These changes, especially in the beginning, were enacted under the auspices ‘arms for agriculture’ (‘bracos para a lavoura’). However, to prevent shortages of labor, the state had to enforce the laws. In other words, assuming that immigrants were rational, their preference for Sao Paulo over Argentina, for example, must have been based in the following factors: (1) enforceable land and labor laws; (2) concrete possibility of acquiring land and becoming coffee producers; and (3) similar infrastructure and rule of law. An attractive explanation as to why the laws were only enforceable in Sao Paulo is based on the higher educational level of the Paulista political elite and which therefore produced ‘better’ leaders. However, this type of claim has already been dismissed.1 1 3 A more convincing reasoning is the one we provide here. In brief, the common aspect that explains the credibility of these different laws is that the 1 1 3 Love (1980) compiled the studies from Levine (1978) and Graham (1973) about the features of the political elites from Pernambuco and Minas Gerais during the Old republic, respectively. He then built the same index for Sao Paulo. An interesting conclusion is that the political elites from the three states had a similar number of members with college degree, mainly in law. Pernambuco, however, was the state with the smallest number of leaders that did not have a college degree, followed by Sao Paulo and Minas Gerais. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 119 political elite in Sao Paulo did not derive its power-from their monopoly over land, as was the case in Minas and Rio. Not only did the Paulista elite have sources of wealth other than land but also, these ‘other sources’ provided them with more efficient and complex networks of influence over the state decisions than those with only ‘plain/simple’ monopoly over land. Their activities ranged from coffee factorage, to coffee railroads, exporting, banking, external financing, and other activities. To accomplish these goals, we divide this chapter into four sections. The most important institutional changes in the land and labor market are presented in the next section (5.1). We briefly summarize the 1895 land law (section 5.1.1); the 1907 immigration law (section 5.1.2) and the 1921 Washington Luis land law (section 5.1.3). The short-run determinants (or the necessary conditions) of each one of these regulations are then analyzed in section 5.2. Then, in section 5.3, we provide the sufficient condition - given by the agreement between the formal and informal politicians - that, in our view', explained why these changes led to permanent institutional devices that were not reversed when the immigration program was terminated. A summary of our conclusions is in section 5.4. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 120 5.1 Institutional changes in the land and labor market during the Old Republic in Sao Paulo (1890-1930) 5.1.1 The 1895 Land law In 1895 Sao Paulo became the first state in the Republic to pass a new land law that substantially changed the dispositions of the 1850 land law. The 1895 land law recognized that, due to the rigid deadlines imposed by the 1850 law, most private land remained without titles. As a consequence, the new law allowed private claimants (squatters and sesmeiros) to register any lands acquired between 1850 and 1895. To prove possession of their land, the 1850 law allowed private claimants to present the parish priest’s registration or any document indicating that the person was living on the plot at least one month before the enactment of the law. Under the 1850 law, this did not entitle the claimant to receive a title. For example, in 1860, the priests from all parishes in Sao Paulo sent the Imperial government a list of 38,894 plots of land in that province that were claimed in this way by private parties.1 1 4 Hence, these properties had been ‘registered’ since 1860 but their owners did not have titles and thus the land could not be mortgaged or sold. The 1895 law, however, accepted the parish priest’s certificate directly as proof of ownership. No other state in the federation followed suit. As a result, titling remained elsewhere a much lengthier and more costly process than it was in Sao Paulo thanks to its 1895 Land 1 1 4 Sao Paulo and Santa Catarina were the only two provinces, out of nineteen, that presented a completed version o f the Parish priests registration. Source: Maatiei Felizardo da Silva, Relatorio do Ministro da Agricnltura, 1864, p. 26-28 and Anexo D, p. 1-77. Antonio da Silva Prado, Relatorio do Ministro da Agriculfura, 1886, Anexo X, p. 1.-44, R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 1 2 1 Law. The point here is that while the Minas Gerais land law had many requirements for private claimants to obtain a title on their lands, the Sao Paulo land law required the parish priest registration as a proof of residence. Different from Minas, the 1895 Sao Paulo land law allowed claimants to receive a title on their whole properties, and not only on the part of the land that was being used for productive purposes. In other words, extremely influenced by Antonio Prado’s 1886 proposal to change the 1850 land law, the 1895 Sao Paulo land law had all the features of a liberal law, a law that did not intend to change people’ behavior.1 1 5 Instead, the legislators legalized many procedures that were being informally and efficiently adopted by private claimants. The process to receive a title started at the municipal registrars office where the claimant had to (1) pay the registration fees ($1.66/hectare up to 2000 hectares and $1.4 per hectare for each additional area above 2000 hectares), (2) present the Parish priest’s registration or other proof of ownership and (3) request state land officers to survey his possession. The principle of squatter’s rights became a central element in Sao Paulo’ s land tenure legislation.1 1 6 The measurement costs, under the 1895 land law were 445% higher than those imposed by the 1850 land law, and yet, we observe an increase in the number of rural titles. Instead of imposing a rigid 1 1 5 By changing people’s behavior we mean that the 1899 M im s Gerais land law announced that claimants would only receive a title on the part of the land used for productive purposes. The unused part would become public land. In our view, the law was trying to change people’s attitnte towards their own property7 : now' they would volutarly go to the registrar to lose part of their lands and obtain a title on the ‘productive’ part. The market mechanism and people’s behavior, however, was and is much more creative than the law. By the end, the number of properties that held a valid title in Minas Gerais, as a by-product of this law, was possibly much lower than the one in Sao Paulo. 1 1 6 Lands obtained by squatting after 1895, however, were still not recognized as legal. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 122 deadline, the law allowed a period of ten years (until 1905) for owners to claim ownership on their lands. It was only in 1905, that unclaimed sites were considered ‘public land’ and then sold by the Department of Agriculture (for $3.00/hectare). The 1895 law incorporated the central features of Antonio Prado’s 1886 proposal to change the national 1850 law. Indeed, it was Antonio, already a wealthy Paulista coffee producer, who created and presented the 1895 law. In brief, Prado claimed that the Brazilian situation was similar to the one in the American West. He proposed that public land should be granted free of charge to settlers and that squatters lands used for productive purposes be legitimized. The land laws in Sao Paulo were very liberal in making it easy for private claimants to receive a title on their lands. The best example is its acceptance of the ‘parish priest’ or any other ‘legal’ proof of ownership. Another coffee producing state, Minas Gerais, did not follow such a path. Indeed, Minas enacted its first land law as a republican state in 1899 (Law 269, 8/27/1899). This law allowed properties created under private domain after 1878 to be registered any time before 1904. However, the law did not allow the parish priest’s registration to be used as a proof of ownership and it Imposed a land tax that discouraged titling. 5.1.2 The 1907 Labor (Immigration) law Law 1458, enacted on April 10, 1907 during the continuing crisis in the coffee economy, further regulated Immigration, colonization and foreign labor In the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 123 state. Of the law’s 334 articles, we summarize only the five that are most relevant to immigration and colonization. First, the law was clear in assigning priorities among those who wanted to purchase land in the settlements: first, immigrants to Sao Paulo arriving after 1895; second, immigrants already in the state, and last, Brazilians. Having a family was also a pre-requisite for the right to buy land in these settlements. Out of 3,225 plots in these settlements, 91% belonged to immigrants. On average, the plots were between 35 and 55 hectares in size. Second, the law institutionalized state financing to help immigrants (but not Brazilians) to purchase plots. In 1904, two offices were created just to protect and regulate colonos’ contracts and to match the supply of and demand for immigrants in the different municipios.1 1 7 While at first foreigners did not plant coffee, they did plant cash crops and with the proceeds, they could buy coffee lands. Third, the law established rules for private colonization. The state offered companies and landowners willing to create settlements on their lands the same benefits as for state settlements and paid them US$ 5,000 (10,000 milreis) for each group of 50 families brought to the settlements. Fourth, Article 193 of the law stipulated that the government was in charge of measuring and dividing the plots, and managing the settlements. Possibly inspired by 1 5 7 A 1907 Law increased the budgets o f these offices and charged the colonization office with responsibility for acquiring private land to create more settlements. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 124 the American west colonization experience, the law also financed railroad companies by awarding them with land along the tracks for specified additions of rail lines to the new settlements. These were especially important measures for railroad companies that were generally in the position of having to lay the track before coffee was grown. In this way, some foreign corporations with interest in the coffee business were able to buy relatively large parcels of land in the western plateau that they then resold to other foreigners. Finally, the government was asked to provide long term credit (with a ten year pay back period) for small farmers to buy their first or second rural plot. Especially in the Noroeste and Alta Sorocabana zones of the western frontier, private individuals and land companies took advantage of such facilities to open virgin territory for small farmers. 5.1.3 The 1921 Washington Luis Land Law Immigration policies were successful in Sao Paulo in large part because they complemented existing land laws. In 1921, the governor of Sao Paulo, Washington Luis, enacted Law 1844. According to the new law, land could be given free to private individuals - Brazilian or immigrant - under any of the following conditions: (1) the squatter had claimed the land at least one year prior to the new law; (2) the claimant held some proof of land ownership even if it had not been considered valid under the 1895 law; or (3) the land was not under private domain until the enactment R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 125 of the law. In other words, the law reaffirmed the validity of squatters’ rights by recognizing as legitimate the posses occupied between 1895 and 1921. The law also provided free surveying services for farms wishing to subdivide and credit facilities for the purchase of farm inputs. Often belittled by the literature as the ‘squatters’ feast’ (jubileo do grileiro), the law was indeed encouraging a trend toward smaller farms. Based on the historical evolution of land laws in the United States in which squatters’ rights and other informal arrangements were gradually incorporated into formal law, de Soto (2000) argues that this incorporation of pre-existing informal practices Into formal law makes laws more credible. While de Soto provided no examples of this from Latin America, Sao Paulo’s Land Law of 1921 could be viewed as such an example. The law recognized that private individuals were otherwise either unable or unwilling to pay for land and thus would have the incentive to keep squatting on public land, and for this reason allowed this informal practice to be incorporated into the formal law, making land available formally at only the cost of homesteading. The law tried to enforce the Torrens’ registrar, especially in the rural areas. During this period, the Torrens was being successfully adopted in Australia and in Canada. The main advantage, of this system is the unification of the land and commercial registries, in one place, such that It tends to inhibit landowners from double-registering the same property in order to obtain credit. The Torrens system was created in 1890 by the Provisional government and with the 1891 Republican R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 126 decentralization, it became optional for each state to enforce it. According to two reports (1924, 1925) from the state of Sao Paulo, the new municipalities created in the western plateau after 1921, were adopting the ‘Torrens system’, by unifying the commercial and the land registries in one place. The same report attributed to the ‘Torrens system’ the increase in the number of mortgages where land was the collateral. 5.2 The Short-Term Determinants of the Laws The fact that coffee was booming in the western plateau since the end of the Empire induced legislators to create new institutions to foster such development. A constant source of concern, for both the government and the coffee producers, was the manpower supply. The “Promotora” initiative, during the transition from the Empire to the Republic, was successful in supplying enough immigrants for the coffee fields. In 1892 Sao Paulo created the Office of Land, Colonization and Immigration Services under the head of the department of Agriculture. In 1895 the “Promotora” was formally terminated, mainly because its administrative structure was incorporated by the Sao Paulo department of Agriculture. The state continued its subsidized immigration policy until 1926, by providing free transportation to Brazil, a hostel to receive immigrants, an employment agency in charge of matching the supply of workers with the farmers and a set of recruiters in Europe to screen the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 127 candidates. However, to make it attractive to immigrants Sao Paulo had to organize its land policy to grant titles for immigrants and to build new settlements. The 1850 land law did not foster an increase in land tenure. It was up to Sao Paulo to devise a land law that would stimulate an increase in land ownership rights. In this context, as a way of avoiding a shortage of labor and to assure a large inflow of immigrants, Sao Paulo enacted in 1895 its first land law. By allowing claimants to present almost any proof of previous residence in the site, the law was clearly trying to stimulate private owners to claim ownership of their land. The reason that this state was the first one to enact a land law has to do with the ongoing general perception that the attraction of immigrants relied on its land policy. From the “Promotora” experience, It was known that Europeans went to places that offered a clear possibility of becoming a landowner in a matter of years. Hence, the main explanation of the 1895 land law was the attraction of immigrants. Clearly the 1907 immigration law number 1458 was the most comprehensive piece of legislation in attracting immigrants and the creation of private and state settlements. Once more, the law was trying to avoid a shortage of labor for the coffee farms by encouraging a constant inflow of immigrants. However, this law depended upon the existence of a previous land law. In other words, the Office of Land and Colonization had to follow the stipulations of the land law in alienating and measuring public land. In the absence of a land law, the Colonization office would not have been able to survey or grant titles to immigrants. Even the creation of state R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 128 settlements, during the republic, depended on the existence of a previous land law. In general, immigration policies were successful in Sao Paulo because they complemented the existing land laws. Without land policies, immigrants would not have come to settle down on the Western Plateau of Sao Paulo. Though it was not an official policy , the colonato type of contract was recognized to be a major incentive for European immigrants to come to Sao Paulo. The colonato wage was divided into two parts: the money wage and the non monetary share. While the former accounted for less than half of immigrants income, the latter was the critical part of contract. Coffee farmers allowed colonos to practice Intercropping in their fields. The sale of the cash crops, allowed colonos to received a regular and profitable source of income. This type of contract, mainly found in the coffee fields from the west of Sao Paulo, was also functional for the farmers, because it avoided any need to increase wages when food prices were high. However, after five years, intercropping started to damage the coffee harvest. The farmer, in turn, allowed the colonos to open up new lands where coffee was planted with intercropping. While it was an efficient solution for both parties - colono and farmer - the aggregate outcome was ‘prisoners’ dilemma’ type of situation, where the private individual’s ‘optimum’ produced an inferior outcome for society. In this case, intercropping led to an overproduction of coffee in 1903. The state Identified intercropping as a major cause of the crisis, prohibited planters to open up new coffee fields, Implying that intercropping had to be abolished. In turn, in the next two R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 129 years immigration to Sao Paulo dropped abruptly but not the demand for labor on the farms. As a way to attract immigrants, even without the right to intercrop’, the 1907 immigration law provided a set of incentives to compensate foreigners for their loss of intercropping income. In brief, the prohibition of intercropping in the colonato contracts was an indirect determinant for the 1907 Immigration law. In our view, the 1921 Washington Luis land law was intended to decrease the size of the rural properties and to allow7 immigrants coming to Sao Paulo to become landowners.1 1 8 In this sense, the law accomplished its short term goals: between 1920 and 1934, the number of properties registered In the State of Sao Paulo increased by 210 percent, slightly faster for immigrants1 1 9 than for Brazilians. Yet, because of the larger size of the Brazilian population of the state, by 1934 the incidence of land ownership in the state was three times as high for foreigners as for Brazilians. In brief, the necessary determinant of the three major institutional changes analyzed here was the need to attract Immigrants to ensure an elastic labor supply for the coffee economy. These Institutional changes were the incentives provided by Sao 1 1 8 According to Washington Linz: “ it is imperative to subdivide the large landholdings, the non productive ones, to pay a fair price to its owners and to grant these lands to those without a piece of land who is willing to work on the land. It is convenient to grant free measurement services and to subdivide farms in plots of 20 hectares; create incentives to the owners who subdivide their lands; excempt them from taxes; grant free plots of lands; create and foster credit bureaus for the small lamdowners(...) I ask you members of this house the immediate approval of the land law number 1844 proposal.” Source: Washington Luis, 1920, Mensagem do Presidente de Sao Paulo a Assembleia Legislative 14 de Janeiro de 1920, p. 8-10. 1 1 9 The majority of the new immigrants were Italian and Italians were especially prominent among those who became landowners in the Western plateau of Sao Paulo. We provide the data, to support this claim in the chapter 6. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 130 Paulo to attract a large and relatively constant number of European immigrants. The key point that ensured the continuous flow of immigrants was that these laws were indeed credible and in turn, enabled immigrants to acquire titles on land. As argued in the next chapter, land concentration decreased between 1905 and 1930. In 1905, only 10% of Sao Paulo’s rural area was comprised of small farms (up to 25 alqueires) while 20% of it was comprised of Tatifundio’ (over 500 alqueires). By 1920, ‘small’ farms accounted for 15% and by 1930 for 30%. In addition, by 1930 the latifundio share had dropped precipitously to just 4%. Since Brazilians at all times comprised the majority of landowners, it was the positive externalities brought by the inflow of immigrants that explains the overall change in farm size. The same transformation in the size structure of farms was not found in other coffee- growing states. This leaves us with the question of “Why only in Sao Paulo?” 5.4 The Long-Term Determinants of the Institutional Changes During the Old Republic The prima facie answer to this question as we have suggested above is that the promised incentives including land rights to immigrants were more credible in Sao Paulo than elsewhere. But, this still raises the question: “Why didn’t the other states mimic Sao Paulo since it was obviously very successful? To answer these questions we have to compare the political structure and incentive system at a municipio level in Sao Paulo with those of the other coffee states. In brief, the laws were credible and R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 131 hence followed in Sao Paulo because at the lowest political and administrative level, i.e., the municipio or county, leaders had direct interest in the outcomes. During the Old Republic, the Paulista Republican Party (PRP) was the only party in the state until 1926. It was founded in 1873 by coffee producers from western Sao Paulo. The constitution of the Republic created universal suffrage for all literate Brazilian men 21 and older and provided for direct voting for state government officials, the president, senators, state and federal representatives. At the county level, the informal political leader was known as the ‘coronel’ (colonel1 2 0 ). He (and his group) made sure that the local voters voted for the candidates he supported. In exchange, he would receive from the state government to which his people had been elected ‘favors’ like an increase in the county budget, railroads, and hospitals, among other things. The ‘coronel’ respected his electors, protected them and used violence to defend his power from challengers. Land was a source of power for the colonel. Leal (1948) and Carone (1978) identify the ‘colonel’ as the principal landowner of the county. The coronel’s informal power meant that he was (or appointed one of his allies) to occupy positions in charge of granting land titles. Early in the Republic, when the 1895 law had just been enacted, the ‘coronel’ and his group were the ones to decide on whether or not to grant titles. Usually, the ‘coronel’ appointed the ‘justices of the 1 2 0 According to Leal (1948), coronel is a military position that came from fee Imperial Guard (Guarda imperial). Though the people that 'were known as ‘coronets’ had no ties with the Imperial Guard, being a ‘ coronel ’ in the Guard was fee highest honor a military could obtained. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 132 peace members of the measurement commission and oversaw land titles in his jurisdiction. The absence of any other administrative officers in the counties implied that the colonel had considerable and autonomous power at the country level. The state government was supported by the colonels and, in exchange for votes, supported the colonels’ actions. The above political scenario prevailed to different degrees in all the states of Brazil during the Old Republic. It tended to decrease only after 1930 with industrialization, population growth and the bureaucratization of state and local government. What singles out Sao Paulo from all the other states was that many of the ‘coronals’ were often simultaneously coffee producers, allied with the PRP, politicians, justices of the peace, board members of railroads and factors. By contrast, in Minas and Rio, the coronels were mostly landowners only, and spent virtually all their time on their land. Had land ownership become regularized in those states, their political power that depended so heavily on their discretionary powers would have been reduced. In Sao Paulo, because their landholding were regularized, the coronels could spend more time on other activities. As a result, the coronels’ wealth became increasingly diversified in line with the diversity of their acti vities and contacts. Yet, coffee was common in one way or another to most of these activities. With the end of slavery especially, the universal priority among these landowners/coffee producers/colonels was the urgent need for field hands in the coffee fields. This shortage of labor was especially prominent on the Western R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 133 Plateau and virtually non-existent in the old and stagnating coffee area, the Paraiba Valley. Notably, the Paraiba colonels constituted a relatively weak opposition to the policies of the dominant group from the Western Plateau. According to Love (1980), another important feature displayed by the Paulista political elite was its interlocking nature: almost fifty percent of the Paulistas who occupied political positions between 1890 and 1930 was related to at least one other member (through first cousin or by marriage). Love also points out that there were considerably fewer family ties in Minas Gerais. The close ties (linked by family and business relationships) among the Paulista elite members, during the Old Republic, was especially well articulated by Martinico Prado Junior, in a 1891 speech: TMs is nothing more than a government of ‘compadres’ (1891 speech by Martinico Prado in 1891, quoted in Love, 1980, p. 175). According to Carone (1978) compadrio was the ‘family’ unit organized around the figure of the coronel. Carone makes a clear distinction between the political elite in Sao Paulo and the one in Minas Gerais. In Sao Paulo, according to the author, the most prominent political figures (Washington Luiz, Rodrigues Alves, Campos Salles, Jorige Tibirica, Francisco Glicerio) that held important political positions at a state or federal level had groups of political supporters in the hinterlands. In Sao Paulo there were at least two features that facilitated the provision of the collective good (enforcement of the laws through the provision of titles on land for immigrants) by the coroneis. First, the hegemonic feature of the PRP meant that each R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 134 coronel and his group had control over one of the ten districts in Sao Paulo. Different from the Minas Gerais Republican Party, the Sao Paulo counterpart had a clear structure of leadership in the party that facilitated access of the politicians to the coroneis, and vice-versa. Besides the PRP political dominance, a second factor that fostered to provision of the collective good was the fact that each coronel had a different type of incentive to participate in the purchase of the good. For example, let’s say that the collective good was the enforcement of the land laws (that enticed immigrants with a title on land). In this case, we can say that Rodrigues Alves (governor of Sao Paulo, President of Brazil), for example, whose group controlled the votes in the Central zone, had clear ties with commercial banks and his family- owned factorage houses. m In turn, because factorage houses provided credit for coffee, the coroneis from the Central zone bought the collective good and enforced the land laws. Ataliba Leonel, the coronel and political leader of the Alta Sorocabana zone, was the largest individual shareholder of the Sorocabana railroad.1 2 2 Clearly, Ataliba Leonel was also interested in the provision of the collective good, not because he was involved directly with coffee but because he knew that by enforcing the land laws, the Sorocabana railroad would have a great inflow of passengers (immigrants) that would in turn, tend to expand the coffee frontier. In a matter of 1 2 1 Rodrigues Alves stow comes from: Pereira (1980, p. 132-188). According to Pereira, the family owned factorage houses in the Western Plateau (Jau and Piiatininga) and were major shareholders of the Sao Paolo Commercial Bank (Banco Comercial de Sao Paulo). 1 2 2 According to Love (1980, p. 172). Leonel was a lawyer, die responsible for the creation of the Sorocabana railroad. His region before the railroad, had almot no population and as a way to boost the region (and thus increase the number of votes controlled by Leonel) he succesuflly became a major shareholder in the Sorocabana company. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 135 years, the railroad was going to transport coffee from the hinterlands to the Santos harbor. In Ribeirao Preto two groups dominated the region: the ones linked to the coronel Joaquim da Cunfaa Diniz Junqueira and another linked to Coronel Schmidt. Both were large coffee producers with the difference that Schimidt was a more urban oriented character, involved in the Sociedade Rural Brasileira and had voice in the PRP decisions. Schimidt also had factorage houses and commercial banks in Ribeirao Preto.1 2 3 Despite their political divergences, both coroneis, also bought the collective good (enforcement of the land laws) to entice immigrants to come to the Western Plateau. In brief, we noticed that each of the leaders described had a different type of incentive to participate in the purchase of the collective good. In turn, the coroneis3 support towards the enforcement of the land laws in Sao Paulo is a nice application of Olson3 group features deemed favorable to collective action, named ‘heregeneity of goals’. The chances of free riding were low because all the municipalities in the Western Plateau needed immigrants. In case, one single coronel chose to free ride, immigrants would move to the closest place where the land laws (the collective good) were enforced. The fact that immigrants were evenly distributed among the different municipalities in the Western plateau is a strong indication that the promises of becoming a landowner were binding anywhere in the plateau. Credible 1 2 3 Schimidt information is drawn from: Revista da Sociedade Rural Brazil, ano VI, niimero 60, Jimiio 1925, p. 206-215. Diniz Janqaeira information is from Carone (1978, p. 267-269). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 136 promises, in turn, meant that the paulista elite due to their urban-rural feature, diversified wealth portfolio and high degree of coalition successfully avoided the presence of free riding and hence solved the shortage of labor in the rural areas and enticed immigrants to become coffee producers. In Minas Gerais, according to Carone (1978, p. 267), the situation was different from the one found in Sao Paulo. First, the Mineiro Republican Party (PRM) did not display the same degree of cohesion as the PRP. In part, this weaker cohesion was due to the different economic power of the regions in Minas. The most powerful elite, according to Font (1990,p. 308), came from the Zona da Mata and the south of Minas, the areas used for coffee cultivation. The northern, part of the state was mostly occupied by cattle ranchers. According to Font (1990), the north of Minas was not as politically organized as the central and southern parts of the state. Not only did the party have a low degree of coalition, which increased the chances of free riding in the provision of collective goods but also, some of the most important voices of the Party were the largest landowners in Brazil. According to Carone (1978): In Minas Gerais, there is dominance of some families in the PRM, that in almost all the cases came from the Colonial times: the Viera Resende, from Calaguazes; the Peixoto de Melo, from Uba, the Aires Gomes, from Minas Novas, os Mello Franco, Paracatu. The conservative position of these groups is based on their vast tracts of lands, which in turn, enticed these groups with some type o f regional power over the population (Carone, 1978, p. 267) The low degree of coalition in the Minas Republican Party was a factor that hampered the provision of the collective good. The poor infrastructure in Minas R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 137 Gerais meant that the state had few railroads, very few commercial banks were created before 1930 and basically Minas was an agrarian economy (Wirth, 1977 p. 89). While in Sao Paulo the railroad network integrated the different zones in the state, in both economic and political terms, in Minas, the absence of such an integrated system accentuated the economic disparities among regions. In contrast to Sao Paulo, the coroneis in Minas Gerais had little incentive to participate in the provision of the collective good (enforcement of the law) mainly because the costs of free riding were lower than the benefits from the provision of the collective good. The coroneis from Minas had on land their single most important source of wealth. The provision of this collective good would have a high political cost for the coronet, and hence his best response was to not to enforce the laws. While Minas Gerais had the highest share of immigrant population according to the 1872 census, it chose to terminate the immigration program during the Old Republic. In fact, this choice meant that the political elite possibly knew that the continuation of the program implied the enforcement of the laws. In other words, the continuation of the Paulista immigration program was the trigger effect that compelled the Sao Paulo political elite to provide the collective good and the termination of the same program in Minas worked in the opposite direction and thus hampered the enforcement of land laws in Minas Gerais. Indeed, enforcement of the land laws is a collective good, because it depends on the individual incentives held by each coronel. In Sao Paulo, we explain the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 138 enforcement of the laws by the ‘heteregeity of goals’. Under an Olsonian framework, each coronel had an incentive to participate in the provision of the collective good (enforcement of the laws) because they needed immigrants to work in the coffee farms, to increase the number of passengers in the railroads to increase the number of customers in the factorage firms, to become consumers. The heterogeneity of goals of the Paulista political elite derived from their greater diversification of wealth and resulted in greater provision of collective goods not only enforcement of land laws but also railroads and immigration offices at the local levels, among other things. The state of Sao Paulo’s initiative to subsidize immigration was but the first of a set of measures to solve the labor shortage on the coffee farms of the state. The 1895 and 1921 Land Laws were not fundamentally better than those proposed or even legislated in other states. The difference was that they were not only accepted but even demanded forcefully by the local political forces (the coroneis) as measures they deemed necessary to attract immigrants and thereby solve the labor shortage problem. Since the Western colonels had other sources of wealth than land, the regularization of land tenure did not necessarily reduce their political power. Indeed, it may have enhanced it by allowing them to be more mobile so as to move back and forth to the state and federal capitals and even abroad. The expansion of the coffee frontier further and further to the west had other positive consequences. First, thanks to their mobility and contacts in different areas, it encouraged them to form associations such as the Sociedade Rural Brazileira, Liga R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 139 Agricola, and Associacao Comercial to link those with common interests over a wider geographic area. Second, because of the population growth and colonization of the new areas in the west, it led to the proliferation of new counties (over 150 between 1905 and 1930), something that did not occur in the other coffee-growing states. The increasing number of counties and ‘coroneis’ in that part of the state further enhanced the political strength of this group from the Western Plateau. Third, among the new and large immigrant landowners were some (like the powerful Colonel Schmidt1 2 4 ) who quickly became naturalized and thus qualified to vote and hold office. 5.4.1 Formal and Informal Land Rights in Sao Paulo and Minas Gerais The enforcement of land rights in Sao Paulo had at least three components: political, economic and legal. The first one, expounded in 5.4, led the political elite to agree in the enforcement of the land and labor laws. The incentive to participate in the provision of the collective good was present in Sao Paulo because of Olson’s ‘heterogeneity of goals’. A similar feature was not found in the Minas political elite. The economic element to explain the enforcement of laws has to do with the fact that coffee was a labor intensive activity. In tarn, coffee growers needed immigrants to 1 2 4 Francisco Schmidt (1851-1924) arrived in Sao Panto with his parents as a subsidized immigrant in 1859. In the 1890s he bought his first coffee farm - Monte Alegre- in Ribeirao Preto. Known as “King of Coffee”, he owed the largest coffee farms in Sao Paulo. His political ties to the Brazilian coffee producers gave him with political power, and hence the name ‘colonel’. He was elected to the Riberao council. He is known to have financed many immigrants to acquire coffee lands, granting them with his political support. (Revista da Sociedade Rural Brasileira, 1925, “Coronel Francisco Schmidfp. 206-215). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 140 avoid an eventual labor shortage that would induce an upward pressure on wage rates. The legal component of law enforcement is related to the contents of the laws. In Sao Paulo, the laws enacted during the Old Republic tended to incorporate previous informal practices as major aspects of laws. The 1895 law was inspired by Antonio Prado’s 1886 proposal to change the 1850 land law. It was Antonio Prado who suggested the adoption of parish priests as a proof of residence. The state was willing to grant titles on land and, hence, the provisions of the 1895 land law were extremely liberal on the documents required to prove previous residence. The law accepted the parish priests registration as a valid document. The 1895 land law was not only simpler than the 1850 land law (in terms of the steps required to obtain a title) but also it eliminated the requirement of ‘productive use of the land’ for claimants to obtain titles. In other words, the 1895 Sao Paulo land law increased the number of private rural titles because it decrease owners’ uncertainty on the share of their lands they would receive a title (on the whole property or on the productive part of the parcel). The recognition of squatters’ rights, by allowing a ten year period for squatters to claim ownership, also implied that the law was formalizing a strong informal principle of land rights: squatter rights. In effect, the law broadened rights by transforming squaters’ use rights to true ownership rights. If the 1895 land law incorporated some informal elements as part of the law, the 1921 land law went even further in this respect. By recognizing that squatters could not afford to pay the measurement costs, the 1921 law granted plots of land R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 141 free of survey costs. To encourage the division of rural properties, the law used the market mechanism (the state would pay the market value for each piece of land) instead of simply expropriating the plots or granting titles on the productive part of the lands. While the 1921 law formalized the informal procedures, it was an extremely credible law, especially regarding the land registration. In other words, after the termination of the registration process (wherein both homesteaders and former claimants would register their lands), the government would void all the remaining petitions such that any unclaimed land was then considered public land. It seems that laws worked well in Sao Paulo possibly because of the incorporation of the ‘social norms’ in the laws. The laws in Sao Paulo were not a replacement for informal land rights; rather they worked in tandem with the informal system. While the contents of the laws were an important component to explain why some laws are more successful than others (incorporation of informal rights in the laws), we cannot say that the Minas land laws were inferior to the ones enacted in Sao Paulo because they did not incorporate the ‘social norms’ given by the informal rights. In Minas Gerais, however, we noticed a lack of political or economic reasons for the creation of credible land laws. It seems that the formalization of informal rights did not occur in Minas because there was disagreement among the local political leadership on the enforcement of these rights. Likewise, Minas Gerais had no economic reason to enforce the laws. Cattle ranchers in the north of the state were not interested in obtaining a title on land. In the coffee growing regions, the absence R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 142 of immigrants did not create incentives for the enforcement of laws. While the formalization of social norms usually enhances the credibility and enforcement of the laws, they are not the only factor to explain why land laws were enforced in Sao Paulo but not in Minas Gerais. In political terms, the Republican Party in Sao Paulo had a greater degree of coalition than the one in Minas. On the economic side, the Paulista political elite ‘heterogeneity of goals’ had a strong connection (direct or not) with the coffee complex. Not only the Minas Republican Party did not display a strong degree of coalition but also the different economic zones implied divergent economic interests. Hence, it was the weak convergence of interests, in both economic and political terms, that prevent the land laws from being enforced in Minas Gerais. 5.5 Conclusion The laws regarding the land and labor markets have often been belittled by the literature as irrelevant to attract immigrants, especially in a country famous for creating laws ‘for the British to see’ (‘para o ingles ver’). Up to now, the literature has not moved beyond the simplistic conclusion that the laws were inefficient to promote any significant change in terms of landownership in Sao Paulo. The subsidized immigration program, in turn, was responsible for attracting immigrants, considered by most of the authors to have been ‘semi-slaves’ in order to prevent any shortage of labor in the coffee farms. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 143 We decided to challenge this explanation mainly because all the other countries that were attracting large numbers of immigrants in the first thirty years of the 20th century offered free land, transportation, and education, among other public goods. Europeans usually migrated to regions/countries where the rale of law was enforced. If that were true, we had to find the laws that enticed immigrants to come to Sao Paulo. This led to a thorough investigation of the legal framework and its implications for the flow of immigrants, and the whole coffee complex. Briefly, we reach two solid conclusions. First, that the subsidized immigration program from Sao Paulo was successful because it was complemented by credible land and labor policies. Second, the short term determinant of these laws - to attract ‘arms for agriculture’ (‘braces para a lavoura’)- should not leave one to conclude either that immigrants were semi-slaves or that very few of them came to own a piece of land. The positive externalities produced by these laws affected the labor, land and credit markets. In turn, the high demand for immigrants induced a long term effect derived from, the enforcement of and the credibility achieved by these laws. The nature of the political elite and their diversified wealth portfolio, implied that they were willing to grant land rights and to enforce the law, mainly because immigrants were needed to remain in the fields while they themselves were gradually moving to the urban areas. While there are many reasons why Sao Paulo became the world’s largest coffee- producing region during the Old Republic, we tried to emphasize the critical role R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 144 played by the laws as a major determinant for the success of the Paulista immigration program. The feature that distinguished Sao Paulo from the other coffee states, Rio and Minas, was that the coordination to enforce these laws came from those at the local level who indeed decided whether or not the laws were enforceable, the ‘coroneis’. In the Paulista counties, the coroneis’ political influence was based not only on land, but also on coffee commerce, banking and railroads. In Rio and Minas, the land tenure situation did not evolve as much as in Sao Paulo because land was still the ultimate source of power of the ‘coronel’. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 145 CHAPTER 6t THE IMPACTS OF THE LABOR AND LAND LAWS AND THEIR LINKAGES IN THE LAND, LABOR AND CREDIT MARKETS IN SAO PAULO DURING THE OLD REPUBLIC (1890-1930) In the previous chapter we identified short and long-term determinants (the necessary and sufficient conditions) of the creation of the land and labor laws. The need for labor for the coffee farms was the major short-term reason for the enactment of these laws. These laws did not reflect the ‘altruistic’ or farsighted long-term development objectives on the part of the political elite. Based on this ‘selfish’ pattern of action, some historians1 2 5 have downplayed the effects of these laws on the labor, land and credit markets. Indeed, they have said that there is little reason to talk about written regulations in a country where ‘credible laws’ are enacted by the ‘coroneis’ and not by the constitution. In dismissing these laws, the literature also missed important aspects of the coffee period in Sao Paulo. In our view, it remains to be explained (1) how immigrants became coffee producers as early as 19051 2 6 and (2) why we observed a decrease in the size of rural plots. The broad question that we try to answer in this chapter is: How do we know that these laws were credible? What were the factors that explain the credibility/enforcement of these laws? In this essay, we answer this question by 1 2 5 Among the most prominent were. Prado It. (1945), Holloway (1980), Dean (1974), Faoro (1959), Petrone (1977), Beiguelman (1973) and Fausto (1977). 1 2 6 In appendix 3 we explain the methodology of the Agricultural censuses that allowed us to have the number of rural plots as the number o f owners with titles on land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 146 studying the impacts produced by these regulations in the labor, credit and land markets. In the labor market, we address the credibility issue by demonstrating that the increase in registered land in the state of Sao Paulo had two major determinants. First, until 1920, the land and labor laws were the main factors that explain the increase in the number of titles granted to immigrants. Second, we observed an overall improvement in land ownership, i.e., with both Brazilians and immigrants receiving titles to their land. An indirect impact of these laws was the attraction of ‘non-subsidized’ immigrants who chose to come to Sao Paulo instead of Argentina because of its diversified immigrant community. These immigrants, often dismissed by the literature, are important because through their experience we can understand how and why the first industries were created in Sao Paulo, and hence one aspect of the linkage between coffee and industrialization. In the land market we address the credibility issue by comparing the land tenure situation among the three largest coffee producing regions: Sao Paulo, Rio de Janeiro and Minas Gerais. As a proxy for the ‘credibility effect3 , we use the number of mortgages in each state such that the greater is the enforcement of the law, the higher should be the number of mortgages. Another by-product of these laws is the decrease in the size of rural properties between 1905 and 1930. As previously discussed, the 1907 immigration law and then the 1921 Washington Luis land law provided various incentives to landowners to subdivide their properties. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 147 In the credit market, we identify three impacts of these laws. First, in part due to the colonato, the overproduction of coffee in 1903 led to the 1906 Taubate agreement. This treaty aimed to reduce the coffee price fluctuations and placed an emphasis on quality by prohibiting low quality coffee from being exported. We discuss the role played by the state in fostering the production of high quality coffee and why the ‘push’ for quality did not really work in Sao Paulo. The second impact from the land and labor laws in the credit market was the increase in the number of commercial banks in the hinterlands of Sao Paulo that were managed by immigrants. The third and broader issue concerns linkages of the labor, land and credit market extending beyond the coffee economy. In other words, why does coffee matter? Our argument is that coffee created the conditions for the ‘export led growth’ economy and indeed created a domestic market strong enough to foster industrialization. Coffee matters because, without these linkages, Sao Paulo would have experienced a much weaker industrialization process (similar to the one in Argentina) that in turn, would not have allowed Brazil to take off during the 1950s. Brazil’s industrial structure is stronger than Argentina, and in fact than any of the Latin America countries, because the positive conditions created during the coffee period were subsequently spread to other Brazilian states but were never replicated in the other Latin American countries. This essay has two broad objectives. The first one is to demonstrate the positive linkages produced by the labor and land laws in the output and credit markets. These R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 148 linkages are, in our view, useful in order to dismiss the widespread idea that coffee producers were trying to maximize their own welfare at the expense of the whole society such that the institutions created during the coffee period were not conducive to economic growth. The second objective is to provide a different view of how private property rights were first created. For the Paulista case, the credibility of the laws was driven by the need to attract immigrants. In our view, private property rights were first created in Brazil to attract European immigrants. The laws evolved and became more and more credible as a way of preserving the immigration flow to Sao Paulo. Especially during the Republic, these laws led to an overall improvement in landownership, and hence, were already working as ‘real land laws’. The innovative aspect of this approach is to suggest that the improvement of land rights happened not because coffee prices were high but because there was a strong political element that was conducive to a superior outcome. In the absence of cooperation among the political elite, like in Rio de Janeiro and Minas Gerais, the two other leading coffee producing states, land rights evolved much more slowly. To accomplish these goals we divide this essay into six sections. The impacts of the laws on the labor market are the main themes of section 6.2. We provide an overview of the whole immigration program (sub-section 6.2.1) and then explain why coffee producers chose immigrants over the native population. The reasons for the upward mobility of immigrants are the subject of two sections. We first indicate the role played by the spontaneous immigrants in creating the first industries in Sao R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 149 Paulo (sub-section 6.2.2) and then explain how and why coionos became coffee producers (sub-section 6.2.3). In particular, in 6.2.3 we use the Sao Paulo censuses (between 1905 and 1934) to illustrate that the improvement in land rights was extremely significant for the immigrants as well as for Brazilians. In 6.2.3 we provide evidence that immigrants accomplished upward and not downward mobility (immigrants were not ‘semi-slaves’ as claimed by Truzzi (1986). Then, in section 6.3 we investigate the impacts of these laws on the land market. More specifically, our concern in 6.3.1 is to investigate whether or not there was any significant change in the size of the rural properties by comparing the evolution of different land size categories from 1905 to 1934. The main motive behind this sub section is to provide sound numbers to re&te the claims expressed by Prado (1945), Dean (1974) and Stolcke (1984) that the political dominance of the coffee producers hampered any change in the land structure. In sub-section 6.3.2, land Is still the broad theme, but now the idea is to evaluate the productivity of immigrants coffee farmers as compared to their Brazilian counterparts in Sao Paulo. Finally, in sub section 6.3.3 we compare the land tenure situation between 1905 and 1930 among the coffee states (Sao Paulo, Minas Gerais and Rio de Janeiro), as a way of supporting our claim that Sao Paulo had a better land ownership record than the two other states. The credit market Is the theme of section 6.4. Our analysis focuses on the impacts produced by the land and labor laws on this market. The Incentives for R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 150 improvements in quality are often dismissed, but were a relevant aspect of the 1906 Taubate agreement that we discuss in 6.4.1 The increasing role of commercial banks in granting credit is discussed in section 6.4.2, with special emphasis on the banks managed by immigrants. In the last section of the credit market (section 6.4.3), we provide a brief explanation as to why we see the coffee boom in Sao Paulo as an application of the staple theory, especially in the provision of public goods externalities that in turn, fostered industrialization. In section 6.5 we provide some statistical tests that in fact corroborate our idea on the immigrant effect in enhancing the credibility of the laws. Our main conclusions are in section 6.6. 6.2 The Impacts of the Labor and Land Laws on the Labor Market: Sao Paulo 1890-1934 6.2.1 The Sao Paulo Immigration Program: Main Features During the Old Republic, Sao Paulo’s immigration program preserved the main features of its former agency (the Tromotora’, created by the Prado brothers at the end of the Empire). As discussed in chapter 4, the main idea of the Promotora was to centralize all the steps of the immigration process into one single unit. During the Old Republic, the Land and Colonization office in the Department of Agriculture was in charge of coordinating the recruiting process in Europe, the transportation of immigrants to Brazil, their reception in Santos, the accommodation of immigrants in the Sao Paulo hostel and the hiring process. There were two main types of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 151 immigrants: subsidized and non-subsidized (or ‘spontaneous’). The former received free transportation to Brazil, came in family units and were usually rural workers in their countries of origins while the later paid for their transportation, were in industrial or commercial activities and usually came alone to Sao Paulo. The bulk of the immigration process was concentrated in the ‘subsidized’ type of immigrant. According to Holloway (1980), the coffee zones in the western plateau received the greatest number of immigrants during the Old Republic, followed by the capital of Sao Paulo. The Paraiba valley did not receive a significant number of immigrants during the Old Republic because it was a decadent zone as compared to the land in the West of Sao Paulo. Besides free transportation, subsidized immigrants also received parcels of rural land in the settlements.1 2 7 Immigrants were not simply transported to the Western Plateau of Sao Paulo; instead they could choose where they wanted to go while in the labor office in the Sao Paulo hostel. A contract between the two parties was signed in the labor office, and In case of a dispute, immigrants were entitled to free protection by the Patronato Agricola. In terms of funding, the immigration program was entirely sponsored by the state of Sao Paulo. As we can see from table 6.1, coffee taxes were the single most important source of revenue for Sao Paulo between 1890 and 1930. On average, for the whole period, coffee accounted for 56% of the total tax revenue. Coffee taxes 1 2 7 Only in 1906 did these subsidized immigrants receive parcels of land, because the 1895 land law granted a ten-year period for private claimants to register tiiesr lands. It was only after this that the state could start to construct settlements for the immigrants. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 152 however, were used for the provision of public goods, and on average only 6% were spent on all phases of the immigration program. In comparison to Brazil’s immigration program during the Empire period, Sao Paulo spent twice as much and therefore received more than two times the number of immigrants that Brazil had received between 1850 and 1889. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 153 Table 6.1 Sao Paulo State Taxes: Total, Coffee tax, Immigration expenditures, Immigration numbers 1892-1930 Year Total tax revenue a B Coffee exports tax revenuesa C as a % of B D State expense with Immigration3 £ E as a % of B F Total Immigration To SP % subsidized % Spontan. 1892 3,748 48Q 372 720 73% 3 61 4% 42,061 95% 5% 1893 1894 7,675 595 12Q 73% 897 12% 81,745 6,918 400 112 200 74% 244 00C 4% 48,947 92%i 6% 91% 9% 1895 276 800 479 400 70% 1,455 80C 16% 139 998 3% 1896 531 200 327 820 71% 836 10C 11% 99 010 96% 4% 1897 055 04Q 720 76% 948 32 C 13% 98 134 97% 3% 1898 632 350 903 900 69% 410 850 7% m 939 95% 5% 1899 782 500 357 650I 75% 3 41 70 C 6% 31 172 11% 1900 271 300 563 580 77% 214 51C 3% 21 038 91% 9% 1901 412 520 357 470} 78% 1,035 23C 11% 70 348 93% 7% 1902 920 720 980 320 76% 502 37 !2 £ j[ 831 86% 14% 1903 182 240: 315 040 74% 57 16 553 53% 47% 1904 303 750 204 250 75%, 167 0 0 c 2% 23 761. 67% 33% 19051 827 520 175 04d 70% 1,015 040 11% 45 839 85% 15% 1906 11 493 900: 644 350 75% 861 30C 7% 46 214 85% 15% 1907 11 941 200 674 110 73% 514 290 4% 28 900 63% 37% 1908 10 048 340 878 900 68% 620 311 6% 37 278 76% 24% 1909 13 654 880 10 295 100 75% 808 79C 6% 38 308 77% 23% 1910 10 119 450 765 100 57% 1,021 68C 10% 39 486 81% 19% 1911 16 091 840 821 440 55% 1,146 560 7% 61 5oa 72% 28% 1912 19 329 600 11 732 80C 31% 1,903 680 10% 98 640 78% 22% 1913 18 861 440 13 102 080 69% 2,103 04C 11% 116 640 21% 1914 14 205 650 10 080 40Q 71% 950 33 7% 46 624 77% 23% 1915 15 296 500 10 271 500 67% 359 75 2% 15 614 66% 34% 1916 13 578 280 713 740 57% 406 87 C 3% 17 011 76% 24% 1917 1 .4 741 250 182 250 42% 926 50C 6% 23 407 82% 18% 1918 13 030 750 500 35% 631 50C 5% 11 447 75% 25% 1919 18 807 360 148 140 43% 510 12C 3% 16 203 64% 36% 1920 16 830 918 010 36% 733 3 2C 5% 32 484 51% 49% 1921 10 697 050 765 580} 35% 1,028 04C 10% 32 678 67% 33% 1922 11 651 770 802 240 33% 752 31 £ 6% 31 281 58% 42% 1923 12 434 200 327 60d 35% 897 80C 7% 45 240 53% 47% 1924 15 616 150 779 840 37% 1,866 12% 085 61% 39% 1925 27 980 88G 11 866 160 42% 1,961 28C 7% 57 429 73% 27% 1926 32 985 549 17 952 480 54% 2,156 98C 7% 76 796 78% 22% 1927 33 077 040 17 755 680 54% 843 3% 61 607 63% 37% 1928 32 772 600 14 322 240 44% 316 68C 1% 40 847 52% R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 154 Table 6.1 Sao Paulo State Taxes: Total, Coffee tax, Immigration expenditures, Immigration numbers 1892-1930 (cont.) Year Total tax revenuea B Coffee exports tax revenues 3 C C as a % of B D State expenses with Immigration3 E E as a% of B F Total Immig. to SP % su te t'd i'z . % spontan 192935,817,360 17,454,840 49% 480,000 1 % ! 53,362| na Na 1930 28,113,750 14,580,500 52% 440,000 2% 30,924 na na Total 556,149,110 317,504,810 56% 32,727,780 6% 1,919,391 76% 23% Note: (a) In current dollars. Sources: Column B: Sao Paulo, Departamento Estadual de Estatistica, Publicacao, pp. i 1-22; Column C: Sao Paulo, Secretaria da Fazenda, Relatorio, various years; Column E: Boletim do Departmento do Trabalho Agricola, (1932) no. 73-74, pp. 67-68. There are at least two main reasons why Sao Paulo had to attract foreign labor instead of using the domestic work force. First, the Brazilian population in 1890 was only one-sixth as large as that of the United States. Second, coffee farmers discriminated against the native population arguing that in comparison to the perceived laziness Brazilians (both native and former slaves), Europeans were hard working, ambitious and diligent people, whose goal was to become landowners1 2 8 . In terms of nationalities, Sao Paulo attracted a more diverse group of Europeans than Argentina, which relied almost entirely on the Spanish. Between 1890 and 1930, according to Cameiro (1950), the majority of immigrants came from Italy (30%)1 2 9 , Portugal (18%), Spain (15%) and Japan (15%). During this period, the ‘others’ were mainly from the Middle East and from the western European countries. 1 2 8 In: Sociedade National de Agrictitura (1920), p. 32-39, c81,87,100, 117,131,172,190,192, 207, 220,246,, 253,265 and 359. 1 2 9 The 1902 Prinatti decree prohibited Italian citizens to use the subsidies to go to Sao Paulo as a way to reduce the immigration to the region. According to Davie (1936) the late unification of Italy led this country to create laws to prevent Italians from leaving the country. In other words, Italian immigration to Brazil, United States and Argentina decreased between 1902 and 1920 (Davie, 1936). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 155 The fact that the Paulista Republican Party (PRP) was the only political party that existed in Sao Paulo until 1926 gave continuity to the immigration program. In 1927, the newly created Democratic party vetoed the funds for subsidized immigration that in turn was discontinued until 1935. The general opinion was that in 1927 Sao Paulo had created the structural conditions to attract the inflow of 130 spontaneous immigrants. 6. 2. 2 Spontaneous Immigrants and Industrialization in Sao Paulo: 1890-1930 Different from the subsidized ones, the spontaneous immigrants that came to Sao Paulo until 1930 were not rural workers. Instead, the great majority had had previous experience with manufactures and commerce. These foreigners chose Sao Paulo, instead of Argentina, because there was a large and diverse immigrant community in the state of Italians, Turks, Arabs, Russians and Armenians.1 3 1 Until 1890, the few existing industries (mainly cotton mills) were located in Rio de Janeiro and owned by Portuguese immigrants. During the Old Republic, Rio discontinued its immigration program and its industries did not move forward mainly because the domestic market remained stagnant. The increase in the size of the domestic market in Sao Paulo is a consequence of the booming coffee economy. In fact, it seems that the foreign merchants first established themselves in Sao Paulo with small factory units to meet certain specific demands from the coffee economy. In Franca, for 1 3 0 Schmidt & Reis (1942: 164-202). 1 3 1 Mamigonian (1976), p. 83-72. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 156 example, two Italian immigrants started producing boots for the coffee colonos.1 3 2 During the 1930s, Franca became the leading shoe industry in Brazil. Sao Paulo did not have any factory to produce flour (that was part of the European diet). Then, Francisco Matarazzo arrived in Sao Paulo from Campania (Italy) in 1891 and became a small wheat importer in Campinas.1 3 3 In 1902, he founded the first wheat mill in Sao Paulo. In the absence of any company making cloth bags (in which to place the wheat), Matarazzo began the textile industry by opening a cloth factory and then a textile company. Mr. Matarazzo had previous contacts in Italy that in turn, enabled him to open a branch of the Bank of Naples in Sao Pauio and in 12 other municipalities of the western plateau. Another interesting case, is Mr. Arthur Diederichesen1 3 4 who opened two companies in Ribeirao Preto in 1914. This German who arrived in Brazil in 1898, and acquired Brazilian citizenship in 1902, is known to be the pioneer in introducing machines for drying coffee (dryers) and other machines used in processing coffee. His friendship with colonel Schmidt (a subsidized German immigrant who became a coffee producer) brought him political influence (‘coronel’), and in 1924 Mr. Diederichesen became the President of the Sociedade Paulista de Agricultura. Spontaneous immigrants were also employed by first generation coffee producers in the production of glass (Santa Marina, owned by Antonio Prado), 1 3 2 BresserPereira (1964), p. 33. 1 3 3 Souza Martins (1967), p. 22-34. 1 3 4 Simonsen (1940). p. 185-191. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 157 cement (Votorantim owned by Lacerda Franco), beer (Antartica, owned by Teodoro Sampaio). In 1920, out of the 36,338 companies in Brazil, 11% were in Sao Paulo. The state accounted for 33% of total Brazilian industrial production and for 38% in 19301 3 5 . In Sao Paulo, the food complex responded for 30% of the 4,145 companies in 1920. Almost 50% of these factories were, in some ways, related to the coffee economy (coffee processing, grinding, benefiting). The textile and the clothes (vestuario) industry accounted for 24% of the total number of industries in Sao Paulo in 1920 and for 30% of the Brazilian factories. The main conclusion is not only that coffee fostered industrialization but also that the later was promoted by foreigners. From the 4, 145 industries in Sao Paulo, there were 2,966 privately owned companies and 49% had Italian owners. The Italian companies employed at least 10% of the total Paulista industrial labor force and accounted for at least 9% of total industrial production in Sao Paulo.1 3 6 Indeed, Sao Paulo hosted 52% of the total number of companies that were privately owned by foreigners in Brazil. In different degrees, these immigrants contributed to the industrialization of Sao Paulo. While they did not directly benefit from the labor and land laws created during this period, there is a consensus in the literature that the choice of Sao Paulo 1 3 5 The number of industries and ownership are from: Separata do Amiario Estatistico do Brasil 1940, p. 29, table II (far Brazil) and Recenseamente do Brazil, vol. V, parte 1, p. LXIL LXIII, LXIV, 11, 30, 31, 42, 43,22 (for Sao Paolo). 1 3 ° We say ‘at least’ became we do not have the value of production and the number of employees for Sao Paulo privately owned industries. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 158 over Argentina was motivated by the larger and more diversified immigrant community that prevailed in Sao Paulo. 6.2.3 The Upward Mobility of the Subsidized Immigrants: from ‘Colonos’ to Coffee Producers During the first ten years of the Old Republic ( 1 8 9 0 - 1 9 0 0 ) , the State of Sao Paulo attracted more immigrants ( 7 5 6 ,0 2 3 ) than Argentina ( 6 4 8 ,0 0 0 ) .1 3 7 Subsidized immigrants going to the coffee zones of the Western Plateau accounted for 4 0 % of this total. By comparing the figures on numbers of landowners and population from the 1 9 0 5 Census for the Western Plateau region, it can be seen that the incidence of landownership was relatively higher for immigrants than for Brazilians.1 3 8 How was this upward mobility possible? The ‘colonato’ contract established between the farmers and the immigrants had two components, namely, monetary and non-monetary. The monetary part called for a fixed piece rate wage set before the harvesting season. The non-monetary component consisted of rights to intercropping and free housing. The sale of cash crops1 3 9 (from intercropping) was so important to the immigrants’ income that in case the owner prohibited intercropping after the required five years, the colonato family usually moved to another farm. The cash income from crop sales and wages enabled many immigrants to acquire land in the coffee regions of Sao Paulo’s 1 3 7 Numbers for Argentina are from: Maurice R. Davie (1939), World Immigration, New York. 1 3 8 In 1905, immigrants accounted for 16,5% o f the population but owned 22% o f the private properties in the Western Plateau. 1 3 9 Usually, the crops were composed by: rice, com and beans. Also, coloms usually sold poultry, in addition to the crops. Gives the dominance of coffee is the Sao Paulo rural area, the State lacked adequate production o f other crops. This is why the sale o f these crops were so lucrative. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 159 Western plateau. This process was facilitated after 1897 when overproduction of coffee began to push prices down sharply, threatening many large plantation owners with bankruptcy. To avoid this, many of them chose to subdivide their estates and offer some of the subdivided land to new buyers. Table 6.2 Landownership and Population in the Rural Areas of Sao Paulo by Zone and Nationality; 1905______________________________ Zones of S a o Paulo Number o f Rural Properties in 1905 Total rural s ta te a Total) B razilians immigrants area (in alqueires) [ Number|% Zone Number % Zone Capital (1st) 2,524 2,028 80% 496 20% 82,331 Paraiba vaJJey (2n d ) 14,252 13,535 95% 717 5% 516,928 Sorocaba (3r d ) 2,570 2,439 95% 131 5% 227,461 Central (4th ) 7,880 6,200 81% 1,480 19% 417,371 Mogiana(5th ) 8,087 6,884 85% 1,203 15% 839,355 Paulista (6th ) 4,583 3,042 67% 1,521 33% 569,904 Araraquarense (7th ) 5,597 3,938 70% 1,659 30% 592,834 Noroeste (8th ) 341 274 80% 67 20% 220,770 Alta Sorocabana (9th ) 5,050 4,140 82% 910 18% 788,027 Baixa Sorocabana (10th ) 4,078 4,000 98% 78 2% 365,581 Southern Coast (11th ) 2,442 2,220 91% 222 9% 83,644 Total (l-H ^ zo n e) 57,184 48,700 85% 8,434 15% 4,704,206 W estern Plateau (4fft-9ft) 31,318 24,478 78% 6,840 22% 3,428,261 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 160 Table 6.2 Landownershlp and Population in the Rural Areas of Sao Paulo by Zone and Nationality: 1905 (cont)_____________________ Zones of Sao PauSo Population 19Q5b state a Total Brazilians Immk i ! 2 Number % Zone Number j% Zone Capital (1s f ) 281,256 188,442 67% 92,814 33% Paraiba valley (2n d ) 405,334 396,292 98% 9,042 2% Sorocaba (3r d ) 103,185 90,353 38% 12,333 12% Central {4th ) 309,556 272,558 88% 36,998 12% Mogiana(5th ) 464,091 417,682 90% 46,409 10% Paulista (6th ) 275,079 265,795 97% 9,284 3% Araraquarense (7th ) 148,400 99,279 67% 49,121 33% Noroeste (8th ) 7,815 4,978 64% 2,837 36% Alta Sorocabana (9th ) 118,905 0 * 2 nofi 79% 24,970 21% Baixa Sorocabana (10th ) 80,820 73,546 91% 7,274 9% Southern Coast (11th ) 85,167 47,572 56% 37,595 44% Total (1-11thzone) 2,279,608 1,950,932 86% 328,676 14% Western Plateau (4ft-9tf t) 1,323,846 1,154,227 87% 169,619 13% Notes: (a) For a list of the municipalities in each zone, please refer to Appendix 1. (b) There is no population data for 1905, so we used the 1900 Sao Paulo population from Camargo. Source: Camargo (1954), vol. 2 Tables: 12,13, 23, 28, 41, 52 and vol. 3, pg. 176,177. The agricultural censuses elaborated by the State of Sao Paulo, between 1905 and 1934, used the landowners who had a title on the land as the criteria for including the rural properties in the data or not. It is only in 1953 that Sao Paulo started using samples of the population for censuses purposes. Pino (1996, 1999), explained that the 1905 and the 1930s Sao Paulo agricultural census were good approximations for the number of rural landowners with a title on land. Dean (1976a, 1976b,) and Hall (1968) argued that this increase in foreign landownership had no relation with the subsidized immigration program, whereas Belgueiman (1973) argued that ‘colonos’ bought marginal land in 1905. While Hall R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 161 claims that immigrants did not have any aspiration, to become landowners, Dean provides a more detailed explanation as to why, according to the 1905 census, ‘colonos’ had not bought land. The author reported the wages from the largest coffee farm in Rio Claro and the colonos’ proceeds from the sale of crops. According to his estimate (between 1890 and 1905) the average income for a ‘colono’ family was $202.4 (880.00 milreis) per year. Dean then explains that, due to inflation, ‘colonos’ were unable to save. In brief, his main conclusion is that ‘colonos’ could not afford to buy land and hence the 1905 increase in foreign landownership is explained by the ‘spontaneous’ immigrants. However, we used Dean’s numbers and used an 1895 survey from Sao Paulo secretary o f agriculture, reported in Holloway (1980, p. 84), that indicated that half of the ‘colonos’ annual income was spent on the family’s maintenance (food, clothing, tools and other needs).1 4 0 In turn, it means that colonos saved 50% of the $202.4 yearly income. 1 4 1 In this case, the annual amount of savings was equal to $101.4 per year. In contrast to Dean, this would make it seem that ‘colonos’ could buy land in 1905. We isolated the municipalities in the western plateau where coffee production accounted for 70% or more of the total rural area. Then, in each one we 1 4 0 The IBGE cost of living study (for the city o f Rio de Janeiro, between 1912 and 1939) shows that housing and food accounted for 70% o f the total expenditures. Source: IBGE, Separate do Anuario Estatistico do Brasil 1939/1940, p. 94, Holloway (1980, p. 80) reports another cost of living study done in 1934 for Sao Paulo with a sample of 185 urban working class. In this report, housing and food accounted for 75% of expenditures. 1 4 1 Colonos had free housing, hospital and schooling, that enabled them to avoid these expenses. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 162 counted the number of foreigners landowners1 4 2 and found that almost 50% of the total foreign landowners bought land in these regions (called ‘coffee cities’). We then found the average and standard deviation of the price of coffee land to be $32.7 and $14.1 (per alqueire) in these municipalities. Finally, we could then estimate that to buy 10 alqueires (24.2 hectares or 49.80 acres) of coffee lands, a family of three colonos had to save for 3.22 years. In other words, it is possible to conclude that colonos could have saved enough to buy rural land as early as 1905. While we did not find stories of spontaneous immigrants that bought rural land, we found some illustrative stories of immigrants that became landowners as early as 1905. Taquaritinga, one of our ‘coffee cities’ located in the Araraquarense zone, became famous for having more foreign landowners (208) than native Brazilians (144), according to the 1905 census. In this municipality, in 1901 Guissepe Mortari, an Italian immigrant who owned coffee land in this city, gave the following account for the annual income and expenses of a colono family made up of three people in a working wage:1 4 3 TAQUARITINGA, 1901 YEARLY INCOME FOR A FAMILY OF 3 1. cultivation o f4,000 trees at 80.00 per 1,000 trees 320.00 2. Harvest of 480 alqueires at 0.50 per alqueire....................240.00 3. Sale of 5 carros (6,000 liters ) of com 1 4 2 The 1905 census does not provide a breakdown of the area owned by Brazilians and by immigrants. Data taken from: Camargo (1954) and land prices from: Estatistica de Producao e Comercio da Secietaria de Agricnltuara do Estado tie Sao Paulo para 1905. 1 4 3 Income data from Mortari’ s report are reproduced from Pio di Savoia, Gberardo (1905). “ Lo Stato di San Paolo (Brasile) e l ’emigrazione itaiiana” Bolletino deli’Emigrazione, p. 36-37. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 163 @ 20.00 per carro......................................................................100.00 4. Sale of 10 bags (1,000 liters) of rice @ 4.00 per bag............................................................................ 40.00 5. Sale of poultry and animals.....................................................150.00 (A) TOTAL INCOME 890.00 YEARLY EXPENSES FOR A FAMILY OF 3 Purchases of food inputs, clothing, tools and other supplies Calculated at 0.5 per person per day........................................547.50 (B) TOTAL SPENDING 547.50 Savings = (A) - (B) = 342.50 The family would be able to save 38% of its income, and if we convert to the 1905 exchange rate the 342.50 milreis was equal to $109.44 dollars. The greater the number of working people in the family, the higher was the amount of savings, though the marginal propensity of savings seemed highly stable among immigrants. According to another example, provided by Mr. Maistrello, a coffee farmer in Pirassununga, In 1902, a coiono family of 10 people, where 6 were at working age the annual income was:1 4 4 PIRASSUNUNGA, 1902: YEARLY INCOME FOR A FAMILY OF 10, WITH 6 WORKERS Cultivation of 16,000 of coffee trees @150.00 per 1,000 trees................................................................ 2,400.00 milreis 1. Harvest of 960 alqueires @ 0.5 per alqueire 480.00 milreis 2. Sale of com, beans and rice...................................................... 600.00 milreis 1 4 4 Income data from Maistrello report are reproduced from: Ramos, Auguste (1923). O Cafe: no Brasil e no Estrmgeiro, p. 558-559. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 164 (A)TOTAL INCOM E..........................3,480.00 milreis (B) TOTAL SPENDING....................... 2,350.00 milreis Savings = (A) - (B) = 1,130.00 milreis. Such family was able to save 32% of its income. At the average exchange rate of 1902, the savings of 1,130 milreis was equivalent to U.S. $271.20. In the Mogiana zone, 20% of foreign owners were located in two municipalities: Ribeirao Preto and Sertaozinho. Martinico Prado found in Ribeirao the ‘terra roxa’ in the early 1880s. Sertaozinho, a few miles west of Ribeirao, was found in the same time by Martinico, due to its exceptional soil quality. Both were essentially ‘coffee cities’ in 1905 with 99% and 97% of coffee planted In the rural areas respectively. While Setaozinho had more Brazilian landowners (171) than Ribeirao (156), each of these coffee cities had exactly the same number of foreign owners (105) in 1905. This third story is from the Italian consul in Ribeirao Preto, for a family of two workers:1 4 3 RIBEIRAO PRETO 1905 YEARLY INCOME FOR A FAMILY OF 3, WITH 2 WORKERS 1. Cultivation of 5,000 of coffee trees @60.00 per 1,000 trees................................................................300.00 milreis 2. Harvest of 450 alqueires @ 0.4 per alqueire............................................................................180.00 milreis 145 Source: Biandao Sobiinfao, Julio (1903). A preciacao da situacao agricola, zootechnica, industrial e commercial do Jo. districto agronomico do estado de Sao Paulo com sede em Ribeirao Preto. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 165 3. Sale of com, beans and rice milreis 270.00 (A)TOTAL INCOME 750.00 milreis (B) TOTAL SPENDING 550.00 milreis Savings = (A) - (B) = 200.00 milreis or US $64.00 per year. According to the above examples, it seems that between 1890 and 1905, immigrants were able to save. Clearly, these examples do not intend to explain the whole movement of why and how immigrants became landowners. Likewise, we are not denying the possibility that some foreign landowners came from the urban areas. However, while the records and stories on the upward mobility of the ‘colono’ are mounting, we did not find a single case where an urban immigrant bought land in the hinterlands of Sao Paulo.1 4 6 Hotter (1972) explains that the Italian immigrants that came to Sao Paulo aimed at becoming landowners. Hutter, researched nine years of Italian immigration to Sao Paulo (1880-1889). The author explains that she did not find any type of evidence that spontaneous immigrants became landowners. According to table 6.2, we observed that a higher share of immigrants (one in every twenty five) than Brazilians (one in every forty-seven) owned a plot of land in the western plateau in 1905 in turn, such a fact, corroborates the idea that the sale of 1 4 6 Even the two most successful foreign coffee producers, Schimdt and Lunmrdelli, were former ‘colonos’ in fee early 1880s. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 166 cash crops and the bankruptcy of some Brazilian coffee producers contributed to an increase in foreign landownership. When the state of Sao Paulo prohibited intercropping in 1904 at the behest of badly hurt landowners, many of the immigrant workers left, creating another labor shortage crisis and forcing the government to create another set of incentives to attract immigrants. What was needed was a mechanism to compensate the immigrants for the loss of income due to the prohibition of intercropping but without again inducing overproduction of coffee. 6.2.3.1 Immigration Policies and Settlements: Further Increases in Landownership 1906-1920 Subsidized immigrants experienced upward mobility even after the prohibition of intercropping in 1904. Table 6.3 shows that, according to the 1920 Agricultural Census, the share of immigrants in the number of registered private properties was quite high, especially in the Western Plateau area of the state. Whereas only 56% of the Brazilian-owned farms in Sao Paulo were located in the Western Plateau, 89% of the foreign-owned farms were in this zone. For the plateau as a whole, almost 40 percent of the properties were owned by immigrants. The table also shows, not surprisingly, that the land parcels belonging to immigrants were smaller than those of Brazilians. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 167 Table 6.3: Rural Establishments and Population by zone and nationality: 1920 Zones of Sao Paulo state8 Rural Establishm ents in 1920 R ural A rea pa a lq u eiresb ) Total Brazilians j immigrants Total Area Av. Area® Num berj0 /o Zone j Number % Zone Brazilians Immigrants Capital (fit) 2,211 1,900 85.9% 311 14.1% 56,273 25 14 Paraiba valley (2n d ) 11,045 10,105 9 1 5 % 940 8.5% 476,749 35 75 Sorocaba (3rd ) 6,702 6,375 95.1% 327 4.9% 212,793 32 33 Central (4th ) 6,501 4,049 62.3% 2,452 37.7% 389,088 50 21 MogianafS#1 ) 10,149 7,301 71.9% 2,848 28.1% 940,752 98 29 Paulista (6t h ) 7,586 4,141 54.6% 3,445 45.4% 694,381 106 33 Araraquarense (7t h ) 13,385 7,163 53.5% 6,232 46.5% 937,956 89 33 Noroeste (8th ) 3,239 1,098 33.9% 2,141 66.1% 327,938 179 39 Alta Sorocabana (9th ) 9,265 6,837 73.8% 2,428 26.2% 1,012,910 105 40 Baixa Sorocabana (10th ) 3,781 3,715 98.3% 66 1.7% 488,119 123 224 Southern Coast (11ft) 2,436 1,561 64.1% 875 35.9% 176,656 52 32 Total 1-11® 76,310 54,245 711% 22,065 28.9% 5,713,615 75 34 W estern Plateau 50,135 30,589 810% 19,548 39.0% 4,383,025 95 32 Notes: (a) The total area per zone is the whole area not the cultivated area, (b) One alqueire equals 2.42 hectares or 5.98 acres, (c) Average area is the total rural area (by nationality) divided by the number of rural establishments. Sources: Censo Agricola 1920, Vol. 3, p. 193- 207 and 280-294. While many immigrants had become landowners by 1920, the inflow of immigrants also had positive externalities for Brazilians. The incidence of landownership also grew for them quite significantly between 1905 and 1920, in part as an effect of the 1895 land law14' and also due to the incentives provided by the 1906 immigration law. 1 4 7 The 1895 land law gave claimants a 10 year period within which to register their lands. In turn, it is possible that some of these claimants were not included in the 1905 because their titling process finished only in 1905. However, these claimants were included in the 1920 census. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 168 Table 6.3: Rural Establishments and Population by zone and nationality: 1920 (coat.) Zones of Sao Paulo Sao Paulo State Population 1920 state3 Total I Brazilians immigrants tiumberf/a zone Number|% zone Capital (1s t ) 654,578 438,499 67.0% 216,079 33.0% Paraiba valley (2n d ) 484,699 472,620 97.5% 12,079 2.5% Sorocaba (3f d ) 188,131 163,531 86.9% 24,601 13.1% Central (4h) 564,393 496,592 86.9% 73,802 13.1% M ogiana(5») 811,974 672,424 82.8% 139,550 17.2% Paulista (6t h ) 530,257 423,175 79.8% 107,082 20.2% Araraquarense (7t h ) 583,771 453,608 77.7% 130,163 22.3% Noroeste (89 1 ) 136,454 103,608 75.9% 32,846 24.1% Alta Sorocabana (9t h ) 341,754 293,250 85.8% 48,504 14.2% Baixa Sorocabana (10t h ) 134,227 132,298 98.6% 1,929 1.4% Southern Coast (ff^j 161,950 119,023 73.5% 42,927 26.5% Total 4,592,188 3,762,627 81.9% 829,561 18.1% Western Plateau (4t*-8»< ) 2,968,803 2,436,657 §2.1% 531,947 17.9% Note: (a) For more information about the zones refer to Appendix 1. Source: Camargo (1954), p. 176 and 177, Table 125 and 126; As previously mentioned Belgueiman (1970) and Stocke (1986) claimed that immigrants acquired only marginal land but not coffee land before 1930. The 1920 Agricultural Census, unfortunately, did not distinguish coffee land from other land. But, by making use of a 1923 survey of coffee farms by the State’s Department of Agriculture, in Table 6.3 we show that immigrants owned 20,493 properties in the Western Plateau. According to table 6.4 immigrants owned 12,939 coffee farms in the same region. Therefore, combining both tables (6.3 and 6.4) we are able to show R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 169 that some 63 percent of immigrant farms in the Western Plateau were owned coffee farms compared to 56 percent for Brazilian farms. As a result, by this date the foreign share of coffee farms in the coffee zone was up to 43 percent. Given the enormous early lead of Brazilians in coffee, this represents a remarkable turnaround in favor of immigrants. In some of the individual zones within the plateau, immigrants accounted for more than half of all coffee farms and in some of the municipios within these zones immigrants accounted for as much as 80 percent of all coffee farms. Table 6.4: Total Number of Rural properties in Western Sao Paulo as compared to the total number of coffee farm s by nationality, 1920,1923 Rural Establishments and Coffee Properties Number of Coffee Trees in the Western Sao Paulo, 1923 Planted area of Coffee Z ones of S ao Paulo Number of Rural Establishm . (1920) Coffee % of coffee zone (Alqueires), 1923 sta te propertie s • • Brazilian jlmmigrants Brazilians j Immigrant Brazilians Immigrants C entral (4ft) 6,501 5,338 70% 30% 57,380,000 13,874,000 29,201 10,114 M ogiana(5th) 10,148 7,004 67% 33% 174,937,000 51,237,000 89,026 26,075 P aulista (6th) 7,586 5,258 48% 52% 111,422,000 54,893,000 56,703 27,935 A ra ra q u a re n se (7th) 13,395 7,632 42% 58% 99,045,000 79,080,000 50,405 40,244 N oroesie (8th) 3,239 536 66% 34% 19,672,000 7,681,000 10,011 3,909 Alta Sorocabana (9t h ) 9,265 4,323 61% 39% 67,637,000 19,982,000 34,421 10,169 W estern Plateau (4th- 9 th) 53,666 30,091 57% 43% 5 30,093,000 2 32,747,000 269,767 118,446 Note: a) Coffee data is Jtom 1923. Notes: (b) The planted area was estimated by using the fact that in there are 1,965 coffee trees in one alqueire. Source: Camargo (1954), p. 174-189, vol. 3 and Boletim do Departamento Estadnal do Trabalho, Nos. 50-51, p. 23-28. As detailed in the previous chapter, the 1906 law institutionalized state financing to help immigrants (but not Brazilians) to purchase plots. By receiving land in the rural settlements (known as ‘viveiros’), immigrants continued to plant cash crops and with the proceeds they could buy coffee land. Between 1905 and 1920, we noticed R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 170 an increase in the land tenure (measured by the number of rural properties in the Western Plateau) in Sao Paulo. 6.23.2 The Third Phase of Improvement in Landownership: 1921-1934 In 1920, Washington Luis discontinued the set of incentives summarized in the 1906 immigration law. According to the Paulista governor, he intended to approve a land law that would to a certain extent, include the incentives from the 1906 immigration law. In fact, the 1921 law is considered by some experts1 4 8 to be one of the most liberal laws ever enacted in Sao Paulo. We see at least two reasons for such liberal law. The first is motivated by political reasons since he intended to run for President and he needed all the support he could get by granting free titles to land. The second reason for such a liberal law has to do with its credibility. Washington1 4 9 Luis announced that the main reason for offering free measurement was because the state wanted to grant titles to private claims only until 1927. After that year, he explained, the usufruct land in private hands would no longer be transferable, mortgaged or sold. From 1927 onwards, private claimants would have to file suits against the government to claim ownership. Claimants benefited from the 1921 legislation and in fact registered their lands. In 1927, Sao Paulo indeed created a disposition enticing the state to bring the unclaimed land under private domain. 1 4 8 This is the opinion o f two highly respected magistrates: Lacerda (1961, Livro 1, vol. 3 and 4) and Cardozo (1954, vol 1, titulo 1) and Cardoso (1947, p. 134-191). 1 4 9 Washington Lais to Epiiacio Pessoa. Rio 19 de Outabro de 1919. Washington Luis AcMve, Arqnivo National, pastas 43 and 44;. Washington Luis, Mensagem do Presidente do Estado de Sao Paulo, 1919: p. 12-19, 1920: p. 8-11 and 1922: p. 71-75. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 171 Table 6.5: Total Number of Rural properties in W estern Sao Zones of Sao Paulo state Rural Properties and C o fee Properties3 Total number of properties. 1934 Coffee Properties 1932 % of coffee zone Brazilians Im m igrants Central (4th ) 27,972 8,067 65% 35% Mogiana(5l t ) 19,810 10,848 67% 33% Pauiista (8th ) 15,628 9,842 50% 50% Araraquarense (7,n ) 33,212 21,333 48% 52% Noroeste (8th ) 31,786 17,434 44% 56% Alta Sorocabana (9ih) 26,548 11,477 47% 53% Total W estern Plateau ) 154,956 79,001 52% 48% Notes: (a) For more information about the methodology of the Sao PauSo Agricultural C ensuses, refer to Appendix 2. Sources; For rural properties Camargo (1954), p, 176-177, voi, 3. For coffee properties: Estatistica Agricola e zootechnica: 1931-1932, p, 32 and 33, Sao Paulo: Secretaria de Agricuitura, Table 6.6: Total Number of Coffee Trees and Planted Coffee Zones of Sao Paulo Number of Coffee Trees in Planted coffee area (in state 0 W estern Plateau 1932 alqueires) 1932 Brazilians {im m igrants Brazilians Immigrants Central (4th) 63,428,000 34,375,000 32,279 17,494 Mogiarsa(5th) 224,915,000 62,000,000 114,461 31,552 Pauiista (6th) 133,158,000 74,135,000 67,765 37,728 Araraquarense (7th) 219,855,000 194,735,000 111,885 99,102 Noroeste (6th) 144,091,000 130,564,000 73,329 86,445 A lta Sorocabana (9th) 97,180,000 70,969,000 49,455 36,117 Total Western Plateau (4-9) 882,627,800 586,778,000 449,174 288,437 Notes: (a) For more information about the zones, refer to Appendix 1. (b) For more information about the methodology of the Sao Paulo Agricultural Censuses, refer to Appendix 2, Sources: For rural properties Camargo (1954), p. 176-177, vol. 3. For coffee properties: Estatistica Agricola e zootechnica: 1931-1932. p. 32 and 33, Sao Paulo: Secretaria de Agricuitura. Comparing the 1934 land tenure situation with the 1920 one, we may conclude that the 1921 land law produced positive effects in the land market. Between 1920 and 1934 in the Western Plateau of Sao Paulo, the number of private titles held by R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 172 Brazilians increased by 202% and to immigrants by 256%. The second effect was a decrease in the percentage of coffee properties owned by Brazilians (57% in 1923 to 52% in 1934) and a further upward movement for the immigrant group (from 43% in 1923 to 48% in 1934). It is our view7 that the land and labor laws produced major changes in the land market. We had three distinct phases of improvement in the land market. The first one, until 1905 was driven primary by the saving from intercropping (through the colonato contract) that in turn, explained how7 immigrants acquired land as early as 1905. Our argument contrasts sharply with Dean (1976a) who argued that immigrants could not save and hence, they could not buy any type of land. The prohibition of intercropping in 1904 was in great part offset by the 1906 immigration law that granted land and other incentives for immigrants. In this second stage (between 1906 and 1920), immigrants’ upward mobility remained fairly constant in relative terms (one in twenty six immigrants owned land in both censuses 1905 and 1920) but relative downward mobility for Brazilians (one in every 47 had rural land in 1905 and one out of 80 owned rural, land in 1920). The 1906 immigration law explains this distinctive pattern of ownership between the two groups (immigrants and Brazilians). Finally, the 1921 land law is best appreciated in the Pauiista 1932 and 1934 censuses. This law indeed led to an improvement in the overall pattern of land ownership and both groups benefited from its liberal dispositions. In brief, the 396% increase in land ownership in the western plateau between 1905 and 1934 is R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 173 explained by the rise in the number of Brazilians who became landowners (64%) and by a similar increase (44%) in foreign landownership. 6.3 The Impacts of the Labor and Land Laws on the Land Market, Sao Paulo (1890-1934) 6.3.1 The Creation of Small Size properties: An overview The classification used here was proposed by Millet (1941). As shown in table 6.6, land concentration decreased between 1905 and 1930. In 1905, Sao Paulo had only 10% of its rural area comprised of small farms (up to 25 alqueires) while 20% was comprised o f ‘latifondio’ (over 500 alqueires). By 1920, ‘small’ farms accounted for 15% and by 1930 for 30%. Also by 1930 the latifondio share had dropped precipitously to just 4%. Since Brazilians at all times comprised the majority of landowners, it was the positive externalities brought by the inflow of immigrants that explains the overall change in farm size. Possibly, the same transformation in the size structure of farms was not found in other coffee-growing states. As time went on, the growth in coffee supply began to outstrip that in demand and also problems in the quality of Brazilian coffee began to arise, causing coffee prices to fall. Significantly, however, it was Sao Paulo coffee producers that led the drive to introduce grading standards and hence to mitigate the problem. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 174 Table 6.7 Sao Paulo State 1905,1920 and 1930: Comparative Size of Rural Properties and Areas of Rural Properties ____________________________ Size Number of Rural Properties Area Rural Properties category (alqueires) 3 1905 1920 1930 1905 192® 1930 Total % Total | % Total ; % Total % Total % Total % Up to 10 20,021 35% 33,255 41.1% 85,287 52.4% 200,210 4% 332,550 7% 852,870 14% 11-25 12,051 21% 16,161 20.0% 38,841 23.8% 301,275 6% 404,025 8% 971,025 16% 26-50 ©,567 17% 15,970 19.7% 19,714 12.1% 478,350 10% 798,500 16% 985,700 16% 51-100 6,648 12% 8.170 10.1% 10,316 6.3% 664,800 13% 817,000 16% 1,031,600 17% 101-250 5,150 9% 5,432 6.7% 6,179 3.8% 1,287,500 26% 1,358,000 27% 1,421,170 23% 251-500 2,188 4% 1,112 1.4% 2,077 1.3% 1,094,000 22% 556,000 11% 623,100 10% 500 and up 1,559 3% 821 1.0% 461 0.3% 987,782 20% 821,000 16% 230,500 4% Total 57,184 100% 80,921 10®% 182,875 100% §,013,917 100% 5,087,075 100% 6,115,985 100% (a) The alqueire in S ao Faulo w as equivalent to 2.42 hectares or 5.98 acres. Source: For 1905: Camargo, (1954), table 104, p. 142; for 1920: Brazil, Diretoria Geral de Estatistica, R ecenseam ento do Brazil de 1920, Vol.3, part 1, Rio de Janeiro, 1923, p.232 and for 1930: Estatistica Agricola e Zootechnica, 1930-1931, p. 31, S ao paulo: Directoria de Estatistica, industria e Comercio. In 1930, there were still latifondio types of properties in Sao Paulo. We cannot, however, generalize the argument to conclude that Sao Paulo had marginal changes in its land policy, as claimed by Dean (1976a), Prado (1979) and Stolcke (1986). The changes in the land ownership partem in Sao Paulo started as early as 1905 as a result of the land and labor laws created during the Old Republic in Sao Paulo. The decrease in the number of latifondios between 1920 and 1930 probably reflects the monetary incentives granted by the 1921 Washington Luis land law for large farmers to subdivide their lands. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 175 6.3.2 Farm Size and Productivity So far, we argued that immigrants contributed to a decrease in the average size of farms. The question that remained to be answered is: were these trends toward foreign farm ownership and smaller farms in the direction of greater efficiency? While detailed data on all inputs other than land is unavailable making it impossible to construct proper TFP measures of efficiency, Table 6.8 provides some relevant information on yields (land productivity) for different sizes and owners. Since fertilizers and other non-labor inputs were probably more available to coffee production on large farms than small ones, their omission probably biases the observed yields in the direction of large farms. Since intercropping, that can lower yields, was presumably more common on small farms (to satisfy liquidity needs) inability to control for intercropping would again bias observed yields in favor of large farms. On the other hand, we might expect more labor use per unit of land on small farms and hence higher yields on small farms. As can be seen from the table, for both Brazilians and immigrants, yields tended to rise moderately with size up to about 50 alqueires (about 125 hectares) but only very slightly if at all after that. More clear, however, is the difference in the yields between small immigrant and small Brazilian farms. Yields were significantly higher for immigrants than for Brazilians up to 50 alqueires.1 5 0 1 5 0 Admittedly, however, other factors could be at work in the determination of yields. In particular, since without fertilizers, yields tended to decrease with time in production, the more recently opened up areas in the most western part of the plateau would quite naturally have greater yields. These farms were also larger and more frequently immigrant-owned than those elsewhere. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 176 Table 6,8: Farm Size and Land Productivity, Sao Paulo: 1934 Size Category (alqueires)a Brazilians Immigrants Area Yield0 Area Yield0 Planted coffee area Production coffee/planted coffee area Planted coffee area Production coffee/planted coffee area up to 4.9 9,279 70 9,381 85 5-9.9 23,400 73 49,601 90 10-24.9 37,700 84 83,538 101 25-49.9 38,457 92 61,192 106 50-199.9 112,675 102 81,771 101 200-499.9 85,173 110 28,351 108 500 and up 64,776 110 18,488 110 Total 371,460 100 332,322 101 Note: (a): O n e alqueire eq u als 2.42 h e c ta re s an d 5.98 acres, (b) C offee production is m easu red in arrobas where one arroba eq u a ls 14.4 kilos o r 31.7 pounds. Source: Resenceamento Agricoia- Z ootechnico, 1934, S ecretaria d e Agricuitura d e S a o Paulo, pp: 29, 35 ,6 1 ,6 5 ,8 5 ,8 9,109,110,129,130,149,153,173,177,197 and 198. During the Republic Sao Paulo became the leading coffee producer in Brazil. Part of this superb performance is due to the immigrants and the actions taken by the State. Indeed, in our view it was Sao Paulo’s land laws and its immigration policies that explained the increasing importance of immigrant-owned farms. Therefore, our explanation contrasts sharply with the current literature on the theme, e.g., the widely quoted Prado (1979) and more recent Stoicke (1986) works, that assert that immigrants became coffee producers only after 1930 due to depression-caused farm sales and that until that date coffee production was largely confined to Tatifundios’. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 177 6.3.3 A Comparison of Land Tenure Among the Coffee States: Sao Paulo, Minas Gerais and Rio de Janeiro In order to provide evidence that the improvement in private land rights in Sao Paulo was not due to the coffee boom but to the inflow of immigrants, we compare the land situation among the coffee states. Minas Gerais and Rio de Janeiro were also relevant coffee producers during the Republic. Both states imposed a land tax in their land laws, which in turn, discouraged titling. Besides, none of the two land laws was as ‘liberal’ as the 1895 Sao Paulo law in accepting the ‘parish priest registration’ or almost any proof of informal ownership. Since titles allow one to mortgage the property and thereby better qualify for badly needed agricultural credit, the comparative numbers of mortgaged properties across states can also be used to assess the impact of different states’ land laws. As shown in Table 6.9, throughout the 1920s, Sao Paulo had about 10 times the number of mortgaged properties as rival coffee growing states Minas Gerais and Rio de Janeiro. Table 6.9: Land Tenure Among the Coffee Producing States: Number of States 1920 1922 1924 1926 1928 1929 Sao Paulo 7,041 9,200 11,158 12,904 16,084 15,727 Minas Gerais 713 1,012 1,011 1.800 1,317 1,421 Rio de Janeiro 833 996 1,208 1,116 1,410 1,402 Brazil 14,437 18,109 21,349 25,458 30,380 29,691 Source: Anuario Estatistico, IBGE 1939/40, p. 52-59. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 178 So far, we have argued that the three largest coffee producing states in Brazil, Sao Paulo, Rio and Minas had different land ownership systems. However, according to Alston, Mueller et alii (1994), one of the variables that need be considered in the degree to which property rights are defined is the average price of an alqueires of farm land in each state, the greater the price the more defined is the system of property rights.1 5 1 Here are the 1920 land prices for the coffee provinces: Table 6.10: .920 Land Prices in the Coffee States: proxy for Land Tenure States Land price Miheis/hectare (A) (A) in current dollars Total Value of Land (milreis) <B) (B) in current dollars Sao Paulo 161.00 33.81 2,237,007,668 469,771,610.3 Rio de Janeiro 106.00 22.26 322,454,264 67,715,382.8 Minas Gerais 60.00 12.60 1,630,509,169 342,406,925.5 Source: IBGE, Recenseamento de 1920, Censo da Agricuitura, “Custo das Terras Recenseadas no Brazil”. Vol. 3, parte 1. Exchange rate = .21 ($/milereis). Sao Paulo has the highest land price per hectare among the coffee provinces, 56% and 168% higher than Rio and Minas Gerais, and among all the remaining Brazilian states. On average (between 1890 and 1930), Minas and Rio de Janeiro together contributed for 18% of total world supply whereas Sao Paulo had 53% of total world 1 3 1 As explained by the authors: “ The variables that need to be considered to define property rights are the average priceof a hectare of farm land in each state (...) secure property rights should increase the value o f land, however, higher land values also increase the demand for more secure property rights. “ (Mueller, Alston, Libecap and Sdrineider, 1994, p. 266). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 179 coffee production.1 5 2 In other words, these were the three largest coffee producing regions in the world. As we argued before, the key that made Sao Paulo land laws better is the presence of a homogenous political elite that enforced the private property rights. It was not because the Paulistas’ laws were better but because the ‘colonels’ needed the immigrants to work in their farms. Their diversified wealth portfolio, in turn, not monopoly power over land, was the source of their political and economic power. The agreement between the formal and informal political elite revolved around three issues: the need to attract immigrants, to enforce the laws and to defend coffee prices. This political elite enforced the law because of the ‘immigrant effect’ that was in turn absent in Minas Gerais and Rio de Janeiro. 6.4 The Impacts of the Land and Labor Laws in the Credit Market: Sao Paulo (1890-1930) 6.4.1 The Quality Problem and the 1906 Taubate Agreement The view among coffee producers was that the falling world coffee prices (since 1897) was the result of speculation by exporters who bought heavily and cheap in Santos (Sao Paulo) in times of large harvests with the intention o f hoarding to capture the benefits of higher prices in low production years that otherwise would !’2 In the same period (1890-1930), Colombia was responsible for 7% of the world coffee production while all the other Lada American countries accounted for 17% o f total coffee supply, all the Asian coffee growing countries for 4% and all the African coffee producing countries for 1% of total world coffee production. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 180 have gone to producers. With the intention, of boosting the international price of coffee, the presidents of Minas Gerais, Rio de Janeiro and Sao Paulo signed in February of 1906 in Taubate what has become known as the Taubate agreement1 3 3 . In brief, the agreement provided that the signatories undertake to maintain a price of 7.9 to 9.34 cents per lb (55 to 65 francs per bag of 60 kilos) in Brazilian markets. Inferior quality coffee, mainly produced by Rio de Janeiro and Minas Gerais, was not to be covered by the agreement. Over-production of the inferior quality coffee would be handled by action of the states themselves to stimulate domestic consumption. The finance for intervention and storage of coffee stocks would come from an externa! loan of 15 million British pounds. The loan would be secured by a tax of 3 francs per bag of export that would be charged by each state. The states were to petition the federal government to create an Office for the Conversion of Currency (caixa de conversao) whose purpose was to stabilize the exchange rate. The need for such an institution was based on the idea that successful valorization would induce upward pressure on the exchange rate. This would occur if either the external loan to buy the excess of coffee or the foture increase in coffee prices would induce an appreciation of the currency. If so, the external success of the valorization could be offset by a demand-decreasing appreciation of the currency. 1 5 3 This section is based on Mambo (1989), Hutchinson (1908), Nettv (1959), Bacha (1968 and 1992), Pintado (1964), Putsch (1988), Topik (1980), Ramos (1923), Sociedade Pauiista de Agricuitura (1902). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 181 Yet, by excluding the inferior quality coffee from the government purchases under the scheme, political leaders from Minas Gerais and Rio saw little benefit of the scheme to the producers in their states. As a consequence, Minas and Rio abandoned the agreement in September, 1906. The Taubate agreement as an administered price policy and currency board (that according to Bacha (1992) was inspired in the 1904 Argentina price stabilization policy) has already been widely discussed in the literature. In brief, the agreement was extremely successful in increasing coffee prices and the external loans taken by Sao Paulo and later by the Federal government were repaid on time. The aspect that is often dismissed is the quality issue. According to the first coffee proposal from Mr. Siciliano in 1902, the improvement in the prices of Pauiista coffee abroad required an improvement in quality. Indeed, according to other experts 1 5 4 , Brazil could export even more coffee if the country could stimulate an improvement in quality. Hence, because Rio and Minas types were of lower quality, as compared to Pauiista coffee, they were excluded from the agreement. We now briefly analyzed the incentives provided by Sao Paulo’s Department of Agriculture as a consequence of the agreement to stimulate an improvement in quality. Until 1930, the highest quality coffee produced in Brazil was known as ‘bourbon’. Known as ‘mild’ (‘soft’) coffee this variety of the arabica1 5 5 coffee could 1 5 4 See: Ulker (1938) ‘All about coffee’. 1 5 5 Since 19S5 the arabica has been losing ground in favor o f the ‘ connilon ’ bean in Brazil. The connilon is more resistant to ’ whether oscillations than the arabica. (FGV/IBRE, 1998). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 182 only be produced in certain regions of the Western plateau where the soil was adequate (Ramos, 1924).1 5 6 According to this specialist, this was the only type of coffee that could compete with the Colombian coffee. However, as Ramos explains the production of the ‘bourbon’ requires two other conditions besides seedlings and adequate soil. First, the harvesting of the cherries requires attention because the pickers could only pick the mature cherries. The second condition was that the drying process had to be done by machines and not by leaving the cherries to be naturally dried by the sun. One of the Western plateau regions that produced the ‘bourbon’ type was Ribeirao Preto. Introduced in 1890s by the Pereira Barreto family in this municipio, the bourbon production increased even more after 1906. This is so because the Sao Paulo government, as a by-product of the Taubate Agreement, granted tax exemptions and even subsidized credit for farmers willing to install in their properties the driers and other machines required to the production of the ‘bourbon’ type of coffee. Sao Paulo was fostering the increase in high quality coffee. While we do not have data, several factors suggest that Ribeirao Preto increased its production of bourbon. This is so because of the related stories. First, the ‘quality’ issue was fostered by Mr. Arthur Diederichesen and Mr. Alexander Siciliano in the 1902 ls6 According to Ulker (1938) and Ramos (1923) there are different varieties o f ‘ arabicas’. For example, under the bard (or green) type of coffee we have: Santos, Rio and National. The ‘bourbon’ and the ‘Colombians’ type are ‘soft’ (or mild) display are considered to be high quality coffee. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 183 valorization plan presented at the Sociedade Pauiista de Agricuitura.1 3 7 Both Siciliano and Diederichesen were from Ribeirao Preto and both were importers of machines to benefit coffee (driers and other machines).1 5 8 Mir Diederichesen and Colonel Schimidt were close friends and through this friendship the ‘bourbon’ type started to be produced in the Monte-Alegre farm, belonging to Colonel Schmidt. Possibly Schmidt had begun to benefit from the incentives provided by the state and started the production of ‘bourbon’ by acquiring the drying machines and then doubling the number of workers in his farm. Schmidt divided his farm into small plots such that a team of workers was in charge of a much smaller number of trees. It is possible to infer that some of the immigrants in this coffee region started to produce the ‘bourbon’ type after the 1906 coffee valorization. It seems that high quality coffee was produced in some parts of the western plateau, by immigrants. 1 5 9 According to the 1934 agricultural census, foreign landowners invested almost four times more than the Brazilians in machines and equipments in their coffee farms. This in turn suggests that high quality coffee was indeed produced by immigrants in the some regions of the Western Plateau. 1 3 7 Interestingly enough, according to M antigm im (1976), the two foreigners were involved with the import of dryers and other machines to sort the beans by size, quality and color. 1 5 8 In 1920 there were 77 factories to benefit coffee in Ribeirao Preto. Only Campinas had more companies (136) to benefit coffee. Source: Reseamento do Brazil de 1920, vol. HI, p. 88-103. 1 5 9 In brief, according to the 1934 Sao Paulo agricultural census, foreigners coffee farmers with small and medium rural properties (up to 25 alqueires) invested two times as much as their brazilians counterparts in machines and equipments. On average, small and medium foreign coffee farmers (with properties ranging from: 0 to 25alqueires) invested US$1,200 in machines and equipments for coffee whereas their Brazilian counterparts invested US$651. Source: Recenseamento Agricola Zootechnico realizado em 1934, p. 19, 83, 109, 129., 149, 173, 197. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 184 6.4.2 Immigrants and Brazilians in tie Provision of Credit and Transportation for the Western Farmers We argued above that the immigrants became coffee producers through the sale of intercropping, the 1906 immigration law and the 1921 Washington Luis law. In contrast authors like Dean (1974) and Hall (1968) had argued that immigrants did not save because their wages were too low.1 6 0 At best, according to Dean, the spontaneous immigrants who remained in the urban areas were the ones who acquired the rural lands and had them registered in all the censuses discussed here. The literature claims that, even if immigrants became coffee producers, they did not have sources of credit to finance the long gestation lag of coffee..1 6 1 Pereira (1980) presented detailed research from the Santos and Sao Paulo chambers of commerce, where she found twenty-one factorage houses in 1904 located in three coffee municipalities (Amparo, Casa Branca and Ribeirao Preto) at the Mogiana zone. These municipalities had almost as many foreigners as Brazilian landowners (413 versus 384 immigrants). A similar pattern was found in the Araraquarense zone (zone 7): seven factorage houses in the two municipalities (Jau and Dois Corregos), known as Terras de imigrante’ (lands of Immigrants), for having the highest cluster of immigrants. 1 6 0 Hie authors did not consider that in Sao Paulo (until 1904) cash crops were in high demand (80% o f die Pauiista rural area was coffee) and this is why intercropping was more important than the monetary wages. 1 6 1 Some authors even suggest that small farmers solved the lack of credit by cultivating cash crops. With tills proceeds from the sales, they were able to finance the long gestation lag from ecoffee. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 185 Similar to the credit system that operated during the last years of the Empire, these factorage houses were opened by the same people that were major shareholders of the Banco Melhoramentos de Jau1 6 2 (founded in 1899 by Brazilian planters). By 1921 the western frontier moved further to reach the Noroeste and the Alta Sorocabana and so did the factorage houses. We also noticed a significant number of regional banks in which the major shareholders were foreigners.1 6 3 In the hinterland, small coffee producers, no matter whether immigrants or Brazilians, did not seem to have faced more difficulty in finding credit than others. In other words, the immigrants who bought coffee farms faced similar credit constraints that other larger coffee producers were experiencing. During the Empire, railroads were opened in the wake of coffee’s expansion. During the Old Republic, the state offered a variety of subsidies for the construction of the Sorocabana, Noroeste and the Araraquarense railroads. In these three regions, the state built settlements for the immigrants after 1906. Indeed, the municipalities in these three zones were created as a result of the railroads (Camargo, 1954). For example, the Noroeste (located in zone 8) had only one ‘municipio’ until 1913 but twenty by 1934. A similar process was observed with the Sorocabana railroad that 1 6 2 Diario Oficial do Estado de Sao Paulo, 1/7/1899, p. 1433. Major shareholders involved in the factorage business: Silva Prado family, Ferraz do Amaral and Maria Almeida Campos. 1 6 3 In Mococa {Banco Regional de Mococa, president: Nciola Centola); in Piracicaba: (Banco di Sconti de Piracicaba; Mr. Matarazzo, director); in Campinas (Banco Popular de Campinas, Mr. Rosseti); in Ribeirao Preto{ Banco de Credito Agricola de Ribeirao Preto); Sorocaba: (Banco de Napoles, Mr. F. Mattarazo). Banks whose boards o f directors were composed of both Brazilians and foreigners included the Banco Italo Popular, Banco Campineiro; Banco Popular de Guaratingueta. Sources: Saes (1986), Dean (1969) and Brcsser Pereira (1964). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 186 opened up zone (9) and led to the increase in ‘municipalities’ as well as the inflow of immigrants in that zone. The profit guarantee still prevailed in Sao Paulo and Pauiista coffee producers were, to some extent, involved in the opening up of new railroads. The question that remains to be answered is the following: Did the railroads promote economic activity, stimulate settlement of new areas and integrate the markets? In our view, the answer is yes. Railroads were critical for the creation of new municipalities and hence new internal markets. Also, railroads encouraged production for the internal market by charging freights proportional to the distance traveled rather than giving rebates to long-distance haulers. Finally, railroads stimulated the creation of foundries and metal working plants that, in 1920, according to Topik (1980) contributed 3% of Brazil’s GDP, In Sao Paulo, especially, the linkage effect was significant and, again according to Topik, the Sorocabana railroad had the largest repair shop in South America in the 1920s. 6.4.3 An Application of Staple Theory to the Coffee Economy There are at least two approaches in economic history that can help us understand this period in Brazilian history. There are a small number of economists (like Pelaez and Neto) who argued that the coffee valorization policies delayed even further the industrialization (that would have happened earlier in the absence of coffee) because R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 187 the costs of these policies were greater than their benefits. On the other end, we have more moderate views associated with Bacha (1968, 1992) and Fritsh (1988) arguing that coffee valorization, policies were supported by the central government to preserve the external value of the domestic currency and to avoid a decrease exports (that was mainly composed of coffee)1 ”4. The critical issue that distinguishes these two approaches is the role of coffee in the creation of linkages to foster industrialization. Neto and Pelaez argued that coffee was not a capital-intensive activity and did not directly stimulate the creation of related industries in Brazil. This view is flawed for at least two reasons. First, the valorization policies allowed the survival of a whole structure (banking, railroads, external financing) that was later used in the industrialization process. Second, if coffee did not contribute to the subsequent industrialization of Brazil, why did the industrialization initiative fostered by Maua in the 1850s fail? In brief, Maua (1878) started his ‘exposition to the creditors’ claiming that he had the right ideas but that they came at the wrong time. He meant that the insertion of a slave-based society in the industrial revolution required the creation of a complex set of financing, commercial banks, railroads, solid domestic market and government support. These were the structural/institutional conditions created by the coffee economy that that were absent in 1850. In brief, Neto and Pelaez view does not take into account that the coffee valorization policies were benefiting the commercial banks (strongly involved 1 6 4 Bacha (1992) explained that these coffee policies were adapted (though not as frequently) until 1980s, mainly because after 1930 coffee exports financed fee import substituting industrialization. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 188 In coffee financing), the incipient stock exchanges, the railroads and even the industries were being created in 1906. Coffee producers created a complex network that benefited coffee but also led to positive externalities to other markets. Railroads, commercial banks and stock exchanges, were some of the ‘by products’ created by the coffee producers. These public goods benefited the whole society and generated long-term spillover effects that allowed a whole set of industries to be created In Sao Paulo. Another important Issue is whether the staple (coffee, in our case) was able to create a domestic market. It seems that the wealth generated by the coffee economy fostered the creation of small industries to attend the demand of the domestic market created by the coffee economy. A major voice in favor of the linkages approach was provided by Hirshman (1977). According to this author, coffee differs from most commodities because the producing countries had the power to set the prices. In turn, Hirshman argued that the nature of coffee production and processing may have stimulated native entrepreneurship and industrial development. The coffee period analyzed here Is a nice application of the staple theory that argues that industrialization is a by-product of the growth of exports. In our view, coffee produced strong linkages that in turn paved the way for an industrialization that, until 1930, was fostered by the ‘export led growth’ Idea and after 1930 driven by import substitution. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 189 6.4.4 Statistical Tests: The Precision of the Land Laws An interesting application of the new institution economics for the Brazilian land laws was proposed by Mueller (1995). Indeed, he was among the first authors to apply the evolutionary1 6 5 theory of property rights to the 1850 Land law in Brazil. He viewed the law as a classical example o f ‘induced institutional change’ arising from a change in the relative price of coffee and thereby the value of land. Following the lead of Feeney (1988), Mueller used the terms of trade as a proxy for land values. If the prices of the products of land were determined in international markets and there were little substitutability between land and other factors of production, real rents should be sensitive to the terms of trade. The improvement in the terms of trade and the expansion of coffee land made land scarce, especially in the coffee zones, thereby stimulating the demand for land ownership rights. In the same vein, Mueller, Alston, Libecap and Schneider (1994) see the increase in coffee prices as having changed the costs and benefits of private property rights, e.g., by raising the benefits to the original owner of evicting a squatter, justifying greater expense in doing so. The rising economic importance of coffee in turn led to an increase in the political power of the coffee producers. To reduce the costs of evicting squatters and hence also the uncertainties associated with landholding, coffee producers demanded a change in institutions. In keeping with standard evolutionary rights theory, Alston, Libecap and Mueller conclude: 1 & > We call this ‘evolutionary’ because it is based on the idea that through time, evolution (or some other exogenous force) is in charge of eliminating the inferior types and allowing the survival o f the fittest (only the institutions that are conducive to economic growth can survive). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 190 Higher land values also created a demand for a change in institutional arrangements concerning property rights in order to alter the private costs and benefits of owning land. As a result of the political pressure to clarify property rights as competition for control increased, the Land Law' of 1850 was passed. (...) Enactment of the law reflected the political influence of landed elites and their desire to limit infringement on their holdings by squatters. (Alston, Mueler and Libecap, 1999, p. 35) The model of induced institutional change, when applied to Brazil, implies that the increase in coffee prices led to a rise in the demand for land. .In the absence o f property rights, the potential benefits would be frittered away in costly conflicts over land, much of which derived from the costs of evicting squatters.1 6 6 Given coffee producers5 political influence, they demanded a land law, which was then supplied by the government (then the Empire of Brazil). According to this interpretation, the 1850 land law was an institutional change induced by the landed elite's demands for well-defined land rights and supplied by a supportive government. The idea that an increase in the relative prices of the products produced by land leads to an increase in the demand for property rights was first developed by Libecap (1978) to explain the gold rash in the Comstock mines. He argues that in the absence of legislation to regulate subsurface gold exploration and with the increasing speed that gold was discovered, miners started to demand more precision in the 1 6 6 In feet, there was no increase in conflicts over land especially because there were very few people who held a title to land Sao Paulo and Minas Gerais were settled largely through adverse possession until 1850. The logic of the argument (increase in conflicts due to absence of land legislation) did not survive an empirical investigation. According to the official documentation researched on the debate that led to the creation of the 1850 land law (Anais da Camara dos Deputados (ACD), tomo I and tomo II, 1843, and ACD, tomo III) we found that the great majority of the representatives argued Brazil did not need a land legislation because land had no value. We did not find a single representative arguing for the law because they observed an increase in the number of conflicts over land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 191 creation of rights. In response, the Nevada representatives (that were supplying the changes in the legislation) refined the former laws to attend the miners’ demands. During this process he observed an increase in gold output and, at the same time, the enactment of new bills to regulate subsurface activities. By the end of the gold boom, he observed a decrease in the number of the laws suggesting the total precision of the law (TPL) exerted a negative influence on the annual changes of the law (ACL). The ACL is positively related to the gold output and negatively related to the TPL (the greater the past body of knowledge the lower is the need for future change). Based on this idea, Libecap builds an ‘index of the precision of the law’. He regress ACL against gold output, the lagged value of TPL and a constant. Using a linear OLS form he reaches significant results for the period when gold was booming. Feeny (1988) applied this argument (increases in export prices and increases in the price of land that lead to a demand for institutional change away from the existing one) to Thailand and Mueller did so for Brazil. However, except for Libecap, these other authors have not built a similar index even though they extend Libecap’s argument for the creation of property rights on land. Our task in this section is then to build this index and then provide some simple tests, in the same vein as Libecap, to see if these generalizations (from Mueller and Feeny) in fact hold. The methodology for the index is provided in Appendix 2. The index is deliberately constructed along the lines of the index developed by Libecap (1978) in Ms analysis of the impact of the gold rush on the development of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 192 property rights in the Comstock Lode, Nevada. The precision index of private property rights in land was developed on the basis of individual scores for seventeen different features, some about private claimants, but others dealing with the measurement of public land, duties of the relevant public officials, and enforcement. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 193 Table 6,11 * , The Total Precision of Land Mights Index and Annual Changes in Brazil and Sao Paulo land law (1850-1930) Annual Change Total precision of Number ol in precision of land rights land rights iaa land rights (A C L ) (TPL)- legislative passed Y e a r * Annua! Change precision of land rights (ACL) Y e a r in Total precision of land rights (TPL)- iegislativea Number o! land rights lawpassec 1850 13 13 1 1890 0 50 0 1851 0 13 C 1891 0 50 1 1852 0 13 0 1892 0 50 0 1853 0 13 c 1893 0 50 0 1854 15 28 2 1894 0 50 0 1855 3 31 1 I 1895 14 64 1 1856 0 31 0 1898 Q 64 1 1857 0 31 c I 1897 0 64 0 1858 3 34 1 , 1898 4 68 1 1859 0 34 G1 1899 0 68 0 1860 1 35 1 I 1900 7 75 2 1861 0 35 0 ' 1901 0 75 0 1862 0 35 0 1902 0 75 q 1863 0 35 0 : 1903 -4 71 1 1864 2 37 1| 1904 0 71 q 1865 0 37 0 1905 0 71 q 1866 0 37 c | 1906 0 71 d 1867 0 37 0 1907 13 84 1 1868 0 37 1 1908 0 84 0 1869 0 37 0 1909 0 84 0 1870 0 37 0 1910 0 84 0 1871 0 37 0 1911 0 84 0 1872 9 37 c 1912 0 84 0 1873 6 43 1 1913 0 84 0 1874 0 43 0 1914 0 84 0 1875 0 43 0 1915 0 84 0 1876 2 45 1 1916 0 84 0 1877 0 45 0 1917 0 84 0 1878 0 45 0 1918 0 84 0 1879 0 45 G 1919 0 84 0 1880 0 45 0 1920 0 84 q 1881 0 45 c 1921 10 94 1 1882 0 45 0 1922 0 94 0 1883 0 45 c 1923 0 94 0 1884 0 45 0 1924 0 94 0 1885 5 50 1 1S25 0 94 0 1886 0 50 Q 1926 0 94 0 1887 0 50 0 1927 0 94 0 1888 0 50 0 1328 0 94 0 1889 0 50 0 1929 0 94 0 (a) Computed as a running total of column 1. 1930 0 94 0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 194 Table 6.11 presents two measures used in the subsequent analysis. In the first column of the table Is the Annual Change In precision of the Land rights (hereafter, ACL). This form of the index Is the one used by Libecap (1978). In the second column is the accumulated or Total Precision of Land laws (hereafter, TPL). Not surprisingly, the large increases in the TPL occurred in 1850, 1854, 1895, 1907 and 1921.1 6 7 The indexes ACL and TPL are alternative measures to be used as the dependent variable in the statistical analysis shown In Tables 6.12 and 6.13, respectively. For explanatory variables we use two measures suggested by the evolutionary model, the value of coffee exports (EXPORTS) and the terms of trade (TOT). Each of these variables should have a positive effect on ACL or TPL. Since slavery was generally asserted to have a negative effect on property rights, we use the number of slaves (SLAVES) as another explanatory variable for ACL. When TPL is the explanatory variable, we use the stock of slaves as the explanatory variable, (SLAVESJS). Another control variable is the simple time trend (TIME) especially important for use in explaining TPL. The lagged value of TPL is also used as an explanatory 16' An example may give the mader a feel for how the index is developed. One o f the 17 categories was ‘duties of provincial presidents’. These were first defined in Article 10 of the 1850 land law. We thus assigned a value of 1 under this category for the ACL of that year. Article 28 of the 1854 supplement to the 1850 law provided a more detailed specification on the role of the provincial presidents and the officers under his supervision, and thus we assigned a value of 1 to the category. It should be clear that the ACL is the annual change, am! in an year where no land bill was enacted we input a value zero. The TPL is the sum of past changes in the law, so the TPL is the accumulated number of annual changes in the law. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 195 variable in estimating ACL. In Libecap’s the lagged TPL has a significant and negative effect on ACL, implying that the more precise the stock of accumulated knowledge becomes (the greater is the lagged TPL), the fewer are the changes required in the ACL. Since our hypothesis is that the relation between the coffee boom and property rights came by way of the need to encourage immigrants to come, we use the average flow of immigrants in period t and period t+1 (IMMIGF) in explaining ACL. The idea here is to investigate if the changes in ACL are effective to attract current and prospective immigrants to Brazil. When TPL is the dependent variable we use the stock of immigrants until time t as an independent variable. For each dependent variable, several alternative specifications are used. The first specification for ACL in Table 6.12 is that which is most akin to the one used by Libecap (1978). It regresses ACL on EXPORTS, the lagged value of TPL and a constant. The alternative measure TOT is used in the specification in column (5). In neither case is the coefficient statistically different from zero. As expected, the lagged value of TPL does have a negative and in all cases significant effect on ACL. As expected, SLAVES have a negative and significant effect on ACL (columns 2 and 3). The effects of EXPORTS and TOT are negative rather than positive in most specifications, showing that in the case of ACL, there is no statistical evidence to support the evolutionary hypothesis. By contrast, IMMIGF has positive (though also not significant) effects on ACL in almost all specifications. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 196 Table 6.12: Regressions for the A n n u al Change in the Precision of the Land Law (ACLt) in Brazil and Sao Paulo, 1850-1938________ ________ ______________ Independent variables (1) (2) (3) (4) (5) (6) Constant 3.33* (2.99) 3.25’ (3.25) 3.48* (3.21) 3.21* (2.79) 6,22” (2.53) 2.650” (2.70) Total Precision of the law in t-1 (T PL m )3 -.0627” (-1.82) -.123* (-2.87) -.148* (-3.08) -.0644“ (-1.86) -.5064” (-2,47) -.0319” (-1.80) Coffee exports (EX PO RTS) .00004 ( 1.01) -.00005 (-1,40) -.00008” (-167) -.000036 (-.94) Slave population int c (SLAVES) -7X 10-6 * * (-2.19) -.00001” (-2.42) Im m igration flow int a (IM M IG F ) -.000021 (-1.14) 7.2x10-s (0.48) .000027 (1.46) 8.96x10-6 (0.59) Terms of T rade (T 01) -.0207 (-158) R 2 .05 .10 .12 .05 ,07 .04 Number o f observations 81 81 81 81 81 81 Notes: From our index of legal change we generated the annual changes of the land law (ACL). The methodology and the data are reported in Appendix 2. Our dependent variable in the six forms is ACLt. (a) The total, precision of the law is the sum of all the annual changes of the law. (b) Average coffee exports of the current and immediate past year measured in British pounds, (c) Slave population in the coffee provinces (Sao Paulo, Minas Gerais and Rio de Janeiro) as reported in Estatisticas Historicas do Brasil, p. 29-30. (d) Immigration flowr is the number of foreigners entering Brazil (until 1889) and Sao Paulo (1890-1930). t- statistics in parentheses. ' indicates significance at 1% level. * indicates significance at 5% level; " indicates significance at 10% level. Since in the Brazilian case laws were evolving much more slowly than in the gold mining case of the United States used by Libecap (1978), we feel that the TPL is more suitable as a dependent variable in the Brazilian case. Turning therefore to the results for TPL in Table 6.13, it can be seen that these results are generally much stronger. The effect of IMMIGS is consistently positive and statistically significant in all specifications. When SLAVESJS is added to the specification in columns (2)- (3), it improves the overall explanatory power of the two forms in comparison to R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 197 form (1). When time trend is introduced (forms (4)-(6)) none of the previous results have any significant changes. The effect of SLAVES_S on TPL is negative and significant in all the forms. Likewise, IMMIGS has a positive and significant effect on TPL in all specifications. The impacts of both EXPORTS and TOT are negative and not significant in all specifications. Admittedly, this test is rather crude. Yet, the poor results for the EXPORTS and TOT variables in Tables 6.12 and 6.13 suggest that the Libecap model does not explain the evolution of land rights for Brazil. Instead, the results, especially those of Table 6.13 support the immigration hypothesis developed in this dissertation. This would seem to be a statistical confirmation of the more anecdotal and descriptive findings demonstrated above showing that land rights in Brazil were refined in order to attract the desired number of immigrants in the face of international competition for such immigrants. In particular, in Sao Paulo, land rights became more effective than in other coffee producing states mainly because the ‘migrant effect5 is a proxy for the ‘credibility5 of the commitment to the immigrants. If coffee prices or values alone were the critical determinant of strengthened land rights, we would have observed similar results in Minas Gerais. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 198 Table 6.13 Regressions for the Total Precision of the Land Law (TPLt): Brazil and Sao Paulo, 1850-1930 Independent Variables (1) (2) (3) (4) (5) P Constant 30.21 * (31.04) 24.09’ (18.14} 20.12’ (7.08) 22.26* (13,80) 22.21’ (14.17) 20.75* (7.31) Coffee exports 3 (EXPORTS) -.00002 (-■ 3 0 ) -.000075 (-1.29) -.000031 (-.55) -.00005 (-1.03) Immigrants (up to t)b (IMMIGS) .000024’ (19.01) .000027' (22.80) .000026’ (38.68) .00001* (3.89) .000018’ (4.24) .000018* (3,83) Terms of Trade (TOT) .02263 (1.58) .0093 (.58) Slave population0 (SLAVES_S) -6.5x1a7* (-5.84) -6 .5 x 1 0 7* (-5.83) -4x10"7 ” (234) -4x 10-7 ” (-2.21) Time trend (T IM E ) .595* (5.73) .326“ (2.14) .298“ (1.72) R2 .95 .98 .96 .96 .97 .97 Number of observations 81 81 81 81 81 81 Notes: Our dependent variable is total precision of the law at time t (TPLt)- (a) Average coffee exports are measured in British pounds, (b) Immigration is the accumulated number of foreigners that entered in Brazil (1850-1X89) and in Sao Paulo (1X90-1930). (c) Accumulated slave population in the cotfee provinces (Sao Paulo, Minas Gerais and Rio de Janeiro) as reported in Estatisticas Historicas do Brasil, p. 29-30. t-statistics m parentheses. * indicates significance at 1 % level. * ’ indicates significance at 5% level; * indicates significance at 10% level. 6.5 Conclusion Throughout this chapter we demonstrated that the land and labor laws were extremely credible during the Old Republic in Sao Paulo. These laws were enforced not because they were better than the ones created in the other states but mainly because the Paulista political elite needed to attract immigrants to solve and avoid a shortage of labor in their coffee farms after the abolition of slaves. The existing literature on the theme (Hall (1968), Stocke (1984)) argued that coffee producers’ monopolist behavior on the labor and land market is the main reason as to why the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 199 land tenure situation in Sao Paulo did not evolve during the Old Republic. Contrary to such claims, we found that the land and labor laws produced growth-enhancing institutions in the labor, land and credit markets. These changes happened because the political elite knew they had to provide the best set of incentives to attract the greatest number of immigrants. In other 'words, it was the competition for immigrants that led the Paulistas to enforce the land and labor laws. The informal power of the municipalities during the Old Republic was sometimes as relevant as the formal one (given by the state government). In the end, the laws were personified by the figures of the ‘coronets’. In Sao Paulo, this group had a diversified source of wealth, and Sand was only one of these assets. In turn, it meant that the control the colonels exerted over their municipalities was not solely based on land. For example, other forms of coercion (or control) from the colonels involved: credit for coffee, free freight for the coffee producers, the creation of Italian1 6 8 schools in the immigrants’ cities, and permission to open up new municipalities, among others. In other words, the informal political elite had other channels of influence besides land. In turn, the ‘immigrant effect’ indeed led to the creation o f ‘credible’ laws. These rules were enforced because the colonels needed the immigrants for their farms. The Coroneis enticed immigrants by giving them land but did not lose their political and economic power because in the process of doing so they acquired greater and more diverse sources of wealth. 1 5 8 Dante Aligueti, nowadays one o f the best schools in the capital of Sao Paulo, was founded by Colonel Luraraidelli to send the son of immigrants to an “catholic Italian school”. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 200 The coffee complex analyzed in this essay created railroads and commercial banks, granted titles on land to immigrants and Brazilians, reduced the size of properties, enabled immigrants to become coffee producers, fostered industrialization, created policies to boost the price of coffee, expanded the urban areas, allowed immigrants to conquer the west, among other things. In large part, the immigrant was the aspect that, in some sense, triggered a chairs of positive linkages among the labor, land, credit and transportation markets that we analyzed in this essay. In brief, we emphasized that the credibility of the institutions (that are created by the laws) relied on the political coalition created to support it. We illustrated the importance of law enforcement by examining the role of coffee in the creation of institutions in Sao Paulo during the Old Republic. When the political coalition ‘agreed to disagree’, property rights were hardly enforced and as in the case of Minas Gerais the privatization of land did not occur. Finally, we have two suggestions for future research. First, the argument that the private property rights were first created to attract workers and not as the result of an increase in the value of land may be applied to other coffee producing regions. In other words, one suggestion is to apply the argument (‘migrant effect leading to political coalition and hence credible laws) to other coffee producing countries. Then, we will be able to indeed determine whether or not the ‘migrant effect’ can generally be counted on to produce institutions that stimulate economic growth. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 201 Another route not taken, but worth exploring in the future, is the application of our argument (credible institutions in the land market depend more on the ability to create a political consensus than on the contents of the law) to the issue of land reform. The land tenure of a country is the outcome of past political arrangements. In turn, one way of approaching land reform is by trying to better understand the past history of the current land tenure. By linking the political structure with the study of past land laws, we may be able to understand how the dominant group remained in power and why past land laws did not accomplish a successful land reform. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 202 CHAPTER 7. CONCLUSIONS Throughout this dissertation we studied the political and economic determinants of the land and labor laws in the Brazilian Empire (1822-1889) and in Sao Paulo during the Old Republic (1890-1930). We had three main objectives. The first was to provide evidence to refute the idea that concentration of land in Brazil is part of the country’s colonial heritage that was in turn, reinforced by the 1850 land law. Our second goal was to provide an empirical application of the new institution economics field to the question of why and how private property rights were first created in Brazil. A third objective was to provide evidence to refute the incorrect idea that coffee was produced in large tracts of land, mostly by Brazilians and that immigrants did not become coffee producers before 1930. In what follows, we expound the major findings of this dissertation. From the literature review, in chapter 2, we found two broad sets of works. In the first set, we reviewed the seminal works, the regional studies, the thematic approaches and the juridical approach. This field has been registering much progress lately, with a great number of high quality works. We then shifted the discussion to the less developed field, the one we named ‘distorted consensus’. The ‘distorted consensus’ focuses on the labor and land markets during the coffee period in Brazil (1830-1930) and has several dimensions and implications for the dynamics of these markets. In brief the ‘distorted consensus’ rests on the following seven assertions: (1) the 1850 land law was created to regulate property rights; (2) the 1850 land law R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 203 failed to attract immigrants; (3) the small increase in immigration to Brazil after 1850 was due to the deteriorating conditions in Europe; (4) it is only in 1880 in Sao Paulo that the immigration initiative became a priority, with the imminent abolition of slaves; (5) between 1905 and 1930 there was no change in the size of rural properties and hence, coffee continued to be produced in latifbndio type properties until 1930; (6) immigrants could not afford to purchase rural land in 1905, 1920 or 1930 and (7) the land laws during the Old Republic in Sao Paulo neither induced any changes in the concentration of land nor stimulated an increase in land titles. Broadly speaking, the ‘distorted consensus’ does not see any major improvement in the land and labor market during the coffee period (1830-1930). Authors like Prado (1966, 1979), Stocke (1986), Dean (1976a, 1971) considered the 1850 Land Law a failure that marked the beginning of land concentration in Brazil. Immigrants came to Brazil only in 1880 and the ones who came earlier did so because of recessionary conditions in Europe and not because of any disposition enacted in the 1850 land law. During the whole period (1830-1930) coffee was produced in Matifundios’ by Brazilians. Immigrants did not become landowners and the land and labor laws, during the Republic, were practically non-existent and hence did not produce any changes in the land or land market. The message we get from the literature is that coffee producers reinforced the concentration of land and did not produce growth-enhancing institutions. Implied in the ‘distorted consensus’ is the idea that laws in Sao Paulo (during the Old Republic) and in Brazil (during the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 204 Empire) were enacted only for demonstration purposes (‘for British to see5 ) but not to be enforced. We decided to challenge the ‘distorted consensus’ through the study of the land and labor laws enacted in Brazil during the Empire and the ones enacted by the state of Sao Paulo during the Old Republic. Instead of a mere description of the dispositions of the laws we studied the implementation of the 1850 land law, the amendments to this law during the Empire and the Sao Pauio land laws during the Old Republic (the 1895 Sao Paulo land law and the 1921 Washington Luis land law) as well as the 1907 labor (immigraton) law. In chapter 3 we studied the determinants of the 1850 land law7 . We found out that the 1850 land law was not about imposing private property rights on land. Instead, the 1850 land law was about labor, mainly because the Brazilian export economy was constrained by the conditions in the labor market. The prohibition of transatlantic slave commerce through the 1850 Eusebio de Queiroz law meant that landowners would face a shortage of labor In a near fixture. The 1850 land law proposed the Introduction of Immigrants, during a transitional phase, where slave and free-labor would co-exist. We see the law as a forward-looking policy created by the Empire to avoid the shortage of labor in the farms and to promote a gradual transition from a slave based system to a free labor economy. The reason the Imperial government had to create a land law to attract immigrants was because the countries chosen by immigrants were the ones where land was available at a low R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 205 price and even free. Mainly because the government did not know the location of its lands, the government created a land law, such that public land was defined by exclusion as whatever lands that remained unclaimed by private parties. The 1850 land law created a regular provision in the annual budgets to be used towards colonization. Very few private claimants received a title on the lands. However, we do not consider the law a failure because its main intention was to prevent a shortage of labor and not to solve problems in the land market. How can we evaluate the impacts of the 1850 land law? The answer to this question is the basis for chapter 4. We then provided a detailed study of the impacts of the 1850 land law in the labor, land and credit markets. In brief, we found out that the 1850 land law made annual provisions for a budget to be used exclusively with the introduction of immigrants. The financial incentives were key to the success of the Brazilian immigration program because the other ‘new countries’ (United States, Australia, New Zealand, Canada and Argentina) were offering cheap (or free land) and subsidized (or free) transportation for immigrants. For Brazil to compete in the ‘market for immigrants’ it had to offer even better conditions, especially in the presence of slaves. In other words, we explain that the recessionary conditions in Europe were only a ‘push’ factor to explain why immigrants left Europe but did not explain why foreigners chose to come to Brazil instead of Argentina, for example. We demonstrated, in detail, the agents involved in recruiting immigrants in Europe and the importance of the financial incentives for attracting both the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 206 immigration agents and the immigrants themselves. The 1850 land law succeeded in its main objective: attract immigrants to Brazil. Starting in 1870s, with the increasing number of measures for terminating slaves, provincial governments started to play a more active role in the immigration policy. During the late 1880s a group of coffee producers from the West of Sao Paulo created a company to bring immigrants strictly to Sao Paulo, due to the eminent abolition of slave and the eventual shortage of labor in the coffee farms. The “Promotora”, immigration company founded by Antonio and Martinico Prado, benefited from the budget provided by the Imperial government (that was authorized by the 1850 land law) and the Sao Paulo provincial budget and was an astonishing success. While in the labor market the 1850 land law indeed prevented the shortage of labor that would have emerged without the inflow of immigrants before the abolition of slaves, the impacts of the 1850 land law in the land market were more modest. The 1850 land law granted very few private titles to Brazilians, such that few private parties claimed ownership and followed the procedure to receive a title on their land. A more interesting result is that despite the stagnation of private titling, the government succeeded in measuring 1,458,407 hectares of public lands. We then explain that % of these lands were titled and granted to immigrants. In turn, we observed that, despite the fact that private property rights to Brazilians did not evolve very much during the Empire (measured by the number of titles granted to Brazilians), the majority of immigrants that came to Brazil receive a title on land. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 207 The 1850 land law produced an indirect impact in the Sao Paulo credit market. The high inflow of immigrants in Sao Paulo increased the money demand which in turn, triggered the creation of commercial banks. Credit was not a constraint for the Paulista coffee growers because of the close-knit relations this group had with the merchants (commercial banks board members and factorage houses). The inflow of immigrants, through the 1850 land law, to the Western Plateau became possible due to the construction of a network of railroads to link the hilly regions of the Paulista hinterlands with the capital of Sao Paulo. The railroads built by Paulista coffee producers were privately financed through the sale of shares to the coffee farmers of each region. While authors like Holloway (1980), Font (1990) and Topik (1987) argued that the coffee period in Sao Paulo started during the Old Republic, we provide evidence on the contrary in chapter 4. In the last quarter of the Empire, we observe the Paulista coffee producers being involved in the construction of railroads, banks, factorage houses, immigration, among other collective goods. This infrastructure network, created by Paulista coffee growers during the Empire was an important, but often dismissed aspect, that enabled Sao Paulo state to take off during the Republic when Paulista coffee production accounted for almost 75% of total Brazilian exports. In 1891, Brazil, as a federative republic, enacted a new constitution. Among other aspects, the jurisdiction over land was transferred from the Federal government to the different state governments. The Old Republic (1891-1930) allowed the states R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 208 plenty of autonomy in a different range of topics, from taxation to foreign policy, to the ability of raising loans abroad, to different land laws. In chapter 5 we examined the determinants of the land and labor laws enacted in Sao Paulo during the Old Republic. While more detail is found in chapter 5, the 1895 land law was a liberal law in allowing claimants to present almost any type of proof of ownership to receive a title on their lands. Inspired in Antonio Prado’s 1886 proposal to amend the 1850 land law, the 1895 Sao Paulo law introduced the possibility of presenting the former ‘parish priest registration’ as a proof of ownership. Different from the 1850 land law, the 1895 law assured that claimants would receive a title on their entire property^, not only on the part that was being used for productive purposes. The 1895 land law was a necessary step for the state to start enticing immigrants with titles on land. The 1907 immigration law was the most comprehensive piece of legislation to attract immigrants to Sao Paulo. Subsidized credit for first time foreigner bom coffee producers, free land in the Western plateau, a whole set of infrastructure (schools, railroads, commercial banks) especially built to attract immigrants, were some of the benefits granted to immigrants willing to come to Sao Paulo. The 1921 Washington Luis land law was even more libera! than the 1895 law because it granted free public land for anyone willing to use the land for productive purposes. This law recognized the informal principle of adverse possession and granted free land to all claimants. The law also provided financial incentives for landowners willing to subdivide their properties and granted assistance R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 209 to Immigrants that owned rural plots of land. The short-term determinant of all these laws was the immediate need to solve and prevent the shortage of labor in the coffee farms. During the Old Republic, Sao Paulo preserved its subsidized Immigration program to avoid any upward wage pressure on coffee growers production. The land and labor laws complemented the immigration program by creating the required structure to make Sao Paulo attractive to immigrants. We then explained, that more important than the contents of the laws was their enforcement. In a country famous for enacting nan-credible laws, we found that the informal power (personified in the figure of the ‘coronets’), at the municipio level acted in tandem with the formal government authorities towards the enforcement of these laws. While it is an interesting finding per se, (Informal power reinforcing the formal power of the laws), the question that remained to be answered was the following: Why did the ‘coronets’ from Sao Paulo enforce the laws while those in Minas did not? In brief, we interpreted the enforcement of both land and labor laws as collective goods and their provision depending on the group’s incentives to participate in their production, as first explained by Olson (1965). In our view, the distinction between the Sao Paulo political elite from, the Minas Gerais group stems from the fact that the Paulista elite had other sources of wealth besides land. Coroneis and state officials owned factorage houses, were on the board of directors of the major commercial banks and railroads, owned small industries, among other activities. This wide range of business activities had three major implications for the R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 210 enforcement of the land and labor laws. First, the ‘heterogeneity of goals3 derived from the fact that the Paulista political elite had a more diversified asset portfolio, wherein land was only one of the assets. Second, the heterogeneity of goals meant that no member or grower could afford not to participate in the collective action to produce the specific public good that was of greatest interest. Third, because of the diversified wealth portfolio, land was no longer the coroneis single source of power. The coroneis knew that to attract immigrants to their coffee farms (to avoid a shortage of labor) they had to enforce the laws (to ensure that immigrants become landowners). The enforcement of these laws became possible because the informal political power of the coroneis did not rely only on the monopoly of land. By granting formal titles to immigrants, the Paulista coroneis prevented an eventual shortage of labor (because of the high inflow of immigrants), improved the overall pattern of landownership (by enforcing the laws) and yet, did not observe a decrease in their political influence. The Minas Gerais political elite did not possess such ‘heterogeneity of goals’, since this group derived its power from the monopoly of land. The political elites did not have any incentive to participate in the provision of the collective good (enforcement of the laws) because its entire power on the population relied on the control over land. Had the Minas’ coroneis granted titles on land, they would have lost the political basis of coercion over the population. Finally, in chapter 6, we studied the impacts of the land and labor laws enacted by Sao Paulo, during the Old Republic, in the land, labor and credit markets. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 211 The overall conclusion is that the laws the enforcement of these laws produced spillover effects in all the markets. Different from the 1850 land law, the 1895 and the 1921 land laws worked as ‘real land laws’ once they contributed to the improvement in the overall pattern of landownership among both immigrants and Brazilians. We use census data (between 1905 and 1934) to show that the number of rural properties with a title increased between 1905 and 1934. We also reported a decrease in the size of the rural properties during the same period. During the whole period, we observe a decrease in the number of latifundios and an increase in the number of small size properties. A similar trend was found for coffee farms: a decrease in the size and an increase in the number of coffee farms owned by immigrants. In our view, the high inflow of immigrants to Sao Paulo (surpassing even Argentina until 1903) suggests that the institutional conditions provided by Sao Paulo were credible enough to entice such a high number of foreigners during such a prolonged period of time. While the labor and land laws created the conditions for immigrants to become coffee producers, we observed an equally large number of spontaneous (non-subsidized) immigrants that came to Sao Paulo to create the first factories. In the credit market, we observed the creation of branches of commercial banks in several .municipalities of the Western Plateau. The interesting aspect is that these branches were usually managed by foreigners and the municipalities in which they were located had a higher concentration of foreign landowners than Brazilians. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 2 1 2 While it is true that the enforcement of land and labor laws solved the shortage of labor on the coffee farms, the positive spillovers created by these laws went beyond the mere inflow of immigrants. Indeed, the ‘immigrant effect’ contributed to decrease the size of rural properties, improved the overall pattern of landownership, enabled immigrants to become coffee growers, fostered industrialization and allowed immigrants to expand the Paulista hinterlands, among other things. In large part, the immigrant was the aspect that to a certain extent triggered a chain of positive linkages in the labor, land and credit market. The pattern of landownership in Brazil during the Empire and in Sao Paulo during the Old Republic suggested that the evolutionary theory of property rights, expounded in chapters 2 and 6, does not explain why private property rights were first created in Brazil. One of our main aspects, emphasized along this dissertation, is that the 1850 land law was created to attract immigrants and not to regulate property rights. In Sao Paulo, during the Old Republic, the 1895 and the 1921 land laws contributed to an improvement in the overall pattern of landownership, and in that sense, worked as ‘real land laws’. In our view, however, these laws were enacted and enforced because of the ‘immigrant effect’. In brief, this dissertation did not find evidence to support the evolutionary theory of property rights. In Sao Paulo, the claim for well defined land rights was a by product of the inflow of immigrants and it did not come on a spontaneous basis as a demand from coffee growers due to an increase in the price of coffee. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 213 In this dissertation we find no evidence to support the widespread idea that the concentration of land in Brazil is a by-product of the colonial heritage, reinforced by the failure of the 1850 land law. Instead, we showed that the law succeeded in its main goal the attraction of immigrants. We also dismissed the argument that the land laws enacted during the Old Republic in. Brazil did not change the pattern of landownership. In Sao Paulo, we found that the enforcement of the land laws produced positive impacts on the number of titles in the rural areas of the state, decreased the size of landholdings, enticed immigrants to become landowners, increased the provision of credit (mainly because of the creation of a formal land market). Improved the quality of coffee, induced the creation of small factories (owned by foreigners) and created a solid infrastructure that enabled the late industrialization of Brazil. One solid conclusion from our study is that the land concentration in Brazil is not a by-product of the 1850 land law. Hence, the colonial heritage cannot explain the current concentration of land. Contrary to the claim that the land laws during the Old Republic did not produce significant changes in the pattern of landownership, we found that the Sao Paulo land laws led to positive changes in the system of private property rights on land. Finally, we found that the evolutionary theory of property rights should be amended to incorporate the Brazilian experience of creation of land rights. In Brazil, during the Empire, and in Sao Paulo, during the Old Republic, a well-defined system o f private property rights was forcefully created to attract immigrants and not due to an increase In the price of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 214 coffee or even due to an increase in the conflicts among landowners that were demanding a change in the legislation. The ‘migrant effect’ was the trigger aspect behind the changes in the legislations. These institutional arrangements were credible not only because they incorporated the social norms in the laws but mainly because there was a strong political agreement between the formal institutions (the Paulista Republican Party) and their informal representatives at a municipio level, the coroneis. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 215 REFERENCES A!len,D.W. (1991). “Homesteading and Property Rights; Or How the West was really won.” Journal of Law and Economics, 34, 1-23. Alston, Lee I., Gary D. Libecap and Bernardo Mueller. 1999. Titles, Conflict, and Land Use. Ann Arbor: University of Michigan Press. Anais do Parlamento Brasileiro. Camara dos Senhores Deputados. 1843, 1844 and 1850. Anais do Senado do Imperio do Brasil, 1848. Assis Cintra, Antonio. (1953). “ O PRP na primeira campanha presidential da Republica”. Correiro Paulisiano, Ian. 30. 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Mensagem dirigida ao Congresso legislative de Sao Paulo pelo presidente do Estado de Sao Paulo, Francisco de Paula Rodrigues Alves, no dia 01 de maio de 1916. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 226 Mensagem dirigida ao Congresso legislative de Sao Paulo pelo presidente do Estado de Sao Paulo, Washington Luis Pereira, no dia 14 de julho de 1920. Mensagem dirigida ao Congresso legisiativo de Sao Paulo pelo presidente do Estado de Sao Paulo, Washington Luis Pereira de Sousa, no dia 14 de julho de 1921. Mensagem dirigida ao Congresso legisiativo de Sao Paulo pelo presidente do Estado de Sao Paulo, Washington Luis Pereira de Sousa, no dia 14 de julho de 1922. Mensagem dirigida ao Congresso legislative de Sao Paulo pelo presidente do Estado de Sao Paulo, Washington Luis Pereira de Sousa, no dia 14 de julho de 1923. 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Further reproduction prohibited without perm ission. 228 Ministerio da Fazenda. 1852. Proposta e Relatorio do Ministro Joaquim Jose Rodrigues Torres, apresentado em 1853 a Asssembleia Geral Legislativa, primeira secao da nona legislatura. Rio de Janeiro: Typographia Nacional. Ministerio da Fazenda. 1853. Proposta e Relatorio do Ministro Visconde do Parana, apresentado em 1854 a Asssembleia Geral Legislativa, segunda secao da nona legislatura. Rio de Janeiro: Typographia Nacional. Ministerio da Fazenda. 1854. Proposta e Relatorio do Ministro Marques do Parana, apresentado em 1855 a Asssembleia Geral Legislativa, terceira secao da nona legislatura. Rio de Janeiro: Typographia Nacional. Ministerio da Fazenda. 1855. Proposta e Relatorio do Ministro Marques do Parana, apresentado em 1856 a Asssembleia Geral Legislativa, quarta secao da nona legislatura. Rio de Janeiro: Typographia Nacional. Ministerio da Fazenda. 1859. 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Further reproduction prohibited without perm ission. 230 Ministerio da Fazenda. 1885. Proposta e Relatorio do Ministro F. Belizario Soares de Souza, apresentado em 1886 a Asssembleia Geral Legislativa, primeira secao da vigesima legislatura. Rio de Janeiro: Imprensa Nacional. Ministerio da Fazenda. 1886. Proposta e Relatorio do Ministro F. Belizario Soares de Souza, apresentado em 1887 a Asssembleia Geral Legislativa, segunda secao da decima vigesima legislatura. Rio de Janeiro: Imprensa Nacional. Ministerio da Fazenda. 1887. Proposta e Relatorio do Ministro Joao Alfredo Correa de Oliveira, apresentado em 1888 a Asssembleia Geral Legislativa, terceira secao da decima vigesima legislatura. Rio de Janeiro: Imprensa Nacional. Ministerio da Fazenda. 1888. Proposta e Relatorio do Ministro Joao Alfredo Correa de Oliveira, apresentado em 1889 a Asssembleia Geral Legislativa, quarta secao da decima vigesima legislatura. Rio de Janeiro: Imprensa Nacional. Ministerio da Fazenda. 1890. Relatorio do Ministro Ruy Barbosa, apresentado em 1891, Governo Provisorio dos Estados Unidos do Brasil. Rio de Janeiro: Imprensa Nacional. Ministerio do Imperio. 1850. Relatorio do Ministro Visconde de Monte Alegre apresentado em 1851 a Assembleia Geral Legislativa, terceira secao da oitava legislatura. Rio de Janeiro: Typografia Nacional. Ministerio do Imperio. 1854. Relatorio do 'Ministro Luiz Pedreira do Couto Ferraz. apresentado em 1855 a Assembleia Geral Legislativa, terceira secao da nona legislatura. Rio de Janeiro: Typografia Nacional. Ministerio do Imperio. 1855. Relatorio do Ministro Luiz Pedreira do Couto Ferraz. apresentado em 1856 a Assembleia Geral Legislativa, quarta secao da nona legislatura. Rio de Janeiro: Typografia Nacional. Ministerio do Imperio. 1856. Relatorio do Ministro Luiz Pedreira do Couto Ferraz. apresentado em 1857 a Assembleia Gera! Legislativa, primeira secao da decima legislatura. Rio de Janeiro: Typografia Nacional. Ministerio do Imperio. 1859. Relatorio do Ministro Marques de Olinda. apresentado em 1860 a Assembleia Geral Legislativa, Segunda secao da decima legislatura. Rio de Janeiro: Typografia Universal de Laemmert. Ministry of Finance. (1929). Economic Data about Brazil, 1910-1928. Rio de Janeiro: Imprensa Nacional. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 231 Monberg, Pierre 1984. Pioneiros e Fazendeiros de Sao Paulo. Sao Paulo: Edusp(Hucitec). Moreira, Marieta de Moraes. “ A Crise dos comissarios de Cafe do Rio de Janeiro”. Tese de Mestrado, Universidade Federal Fluminense, 1977. Mueller, B. (1995). The Political Economy of Agrarian Reform in Brazil. Ph.D. dissertation. University of Illinois, Champaign-Urbana. Mueller, Bernardo, Lee Alston, et. al. 1994. "Land, Property Rights and Privatization in Brazil." The Quarterly Review of Economic and Finance,. 34, 261-280. Mueller, Bernardo. (1997). “Property Rights and the evolution of a frontier”, Land Economics, 73 , (1), 42-57, Netto, Antonio Delfim. (1979). O Problems do Cafe no Brazil. Rio de Janeiro: Editora da Fundacao Getulio Vargas. Nogueira, Oracy. (1964). O Desemolvimento de Sao Paulo: Imigracao Estrangeira e Nacional e Indices Demograficos, Sanitarios e Educacionais. Sao Paulo. North, Douglass C. 1981 .Structure and Change in Economic History. New York: Norton. North, Douglass C. and Robert Thomas 1970. An Economic Theory of the Growth of the Western World Economic History Review, 23 (1), 1-17. North, Douglass C. and Robert Thomas 1971. “The Rise and Fall of the Manorial System: A Theoretical Model”, Journal of Economic History 32 (December), 777-803. Nugent, Jeffrey and James Robinson (2000). Are Endowments Fate. USC Working Paper. Oliveira Carvalho, Pauio Egidio de. (1888). A Provincia de Sao Paulo em 1888: Ensaio Hisiorico Politico. Oliveira Torres, Joao Camilo. (1964). A Democracia Coroada: teoria politica do Imperio do Brasil, 2a. edicao, Petropolis, Rio de Janeiro. Olson, Mancur. 1965. The Logic of Collective Action. Cambridge: Cambridge University Press. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 232 Papali, Maria Aparecida Chaves Ribeiro. 1986. Vestigios do Cotidiano: trahalhadores Escravos. Lavradores, Negociantes e Coroneis em Sao Jose dos Campos (1870-1888). Dissertacao de Mestrado, PUC. Pelaes, Carlos Manuel and Wilson Suzigan. (1976). Historia Monetaria do Brasil: Analise da Politico, Comportamento e Instituicoes Politicas. Rio de Janeiro: IPEA/IMPES. Pelaez, C. M. (1971) “Analise Economica do programa de sustentacao do Cafe, 1906-1945” Revista Brasileira de Economia. 25 (dec, 1971); 5-211. Pelaez, Carlos M. (ed.) (1973) Essays on Coffee and Economic Development^ Institute Brasileiro do Cafe. Pereira, Breno Lobo. (1938). “ A Evolucao Estatistica do Cafe” O Observador Economico e Financeiro. Feb., p. 110-16. Pereira, J.O. de Lima. (1932) Da Propriedade no Brasil. Sao Paulo: Casa Duprat.* Pereira, Lafayette Rodrigues. (1877). Direito dm Coisas, 6a. edicao, Rio de Janeiro/Sao Paulo: Livraria Freitas Bastos,l956. Pereira, Maria Aparecida Franco. (1980). “O Comissario de Cafe no Porto de Santos.” Tese de Mestrado. Unlversidade de Sao Paulo Pestana, Paulo Rangel. (1923). A Expamao Economica do Estado de Sao Paulo mm Seculo (1822-1922). Sao Paulo. Petrone, Maria Teresa Schorer. (1978). “Imigracao” in: Fausto, Boris (ed.). Historia Geral da Civilizacao Brasileira. Vol. 3. Pino, Francisco A. (1986). “Deteccao e Correcao de erros em levantamentos agricolas”. Pesquisa Agropecuaria Brasileira. Brasilia, vol. 21, no. 9: 979- 985. Pino, Francisco A. (2002). “Unidades Amostrais em Levantamentos de Dados Agricolas.” Institute de Economia Agricoia, Working Paper (Mimeo). Pino, Francisco A.. (1996)Metocblogia e Introducao do Levantado de Unidade de Producao Agricola do Estado de Sao Paulo para 1996. Secretaria de Agricultura do Estado de Sao Paulo, Instituto de Economia Agricola. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 233 Pino, Francisco A.. (1999). “Estatisticas Agricolas para o Seculo XXI. Agricultura em Sao Paulo”, Revista do Institute de Economia Agricola da Secretaria de Agricultura de Sao Paulo, 46(2): 71-107. Pio di Savoia, Gherardo (1905). “Lo stato di San Paolo (Brasile) e l’emigrazione italiana” Bolletino dell ’Emigrazione, no. 3, p. 3-119. Platteau, Jean-Philippe 2000. Institutions, Social Norms, and Economic Development. Reading, England: Harwood. Platteau, Jean-Philippe 2000. Institutions, Social Norms, and Economic Development. Reading, England: Harwood. Poliano, L. Marques. (1945). A Sociedade Nacional de Agricultura: Resumo Historico. Rio de Janeiro. Prado Jr., Caio (1979). Historia Economica do Brazil. Sao Paulo: Brasiliense. Prado Jr., Caio. (1966). A Revolucao Brasileira, Sao Paulo: Brasiliense. Prado Jr., Caio. (1969). Formacao do Brasil Contemporaneo: colonia. Sao Paulo: Brasiliense. Prado Junior, Caio Prado. (1945) “Distribuicao da Propriedade Fundiaria Rural no Estado de Sao Paulo” Revista Geografia, ano I no. 1 ,1935. transcrita no: Boletim Geogmfico, no. 29, Agosto, 1945, p. 692-700. Prado Junior, Martinho. 1944. InMemoriam. Ramos, Augusto (1902) Valorizacao do Cafe. Sao Paulo. Revista da Sociedade Rural Brasileira (“Anais” in 1920/21). Revista de Imigracao e Colonizacao. 1(4), October, p. 719-36. Riccardi, Adeline. (1938). “Parnaiba, o pioneiro da Imigracao” Revista do Arquivo Municipal, 44, (February), 136-84. Rohloff de Mattos, Umar. (1987). O Tempo Saquerema. Sao Paulo: Hucitec/INL. Rosas, Roberto. (1987). “O Si sterna Eleitoral Apos 1930”. In: Sistemas Eleitorais no Brasil Joao Paulo M. Peixoto (org.). Brasilia: Instituto Tancredo Neves. Roseberry, William, (ed). Coffee, Society and Power in Latin America. 1995. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 234 Saes, Decio Azevedo Marques de. A Formacao do Estado Burgues no Brasil. Saes, Flavio Azevedo Marques de. (1981). As Ferrovias de Sao Paulo, 1870-1940, Sao Paulo: Hucitec. Saes, Flavio Azevedo Marques de. (1986). Credito e Banco no Desenvolvimento da Economia Paulista: 1850-1930. Institute de Estudos Economicos: Universidade de Sao Paulo. Saito, Hiroshi. (1961). O Japones no Brasil. Sao Paulo. Santos, lose Maria dos. (1942). Os republicanos Paulistas e a Abolicao. Rio de Janeiro. Sao Paulo, Departamento Estadual de Estatistica (1901-29), Anuario Estatistico do Estado de Sao Paulo, Annual, 1901-1929 (superseded by Relatorio da Reparlicao de Estatistica) Sao Paulo, Reparticao de Estatistica. (1894-1900). Relatorio,annual, (superseded by Anuario Elstatistico do Estado de Sao Paulo). 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Further reproduction prohibited without perm ission. 235 Sao Paulo, Secretaria da Agricultura. (1927). O Cafe em Sao Paulo (notas historicas). Sao Paulo. Sao Paulo, Secretaria da Agricultura. (1931). Estatisticas de Producao e Comercio de Cafe, 1921-1930. Sao Paulo. Sao Paulo, Secretaria da Agricultura. (1933). Expansao Economica do Estado de Sao Paulo (dados estatisticos). Sao Paulo. Sao Paulo, Secretaria da Agricultura. (1933). Lavoura Cafeeira Paulista e Sua Distribuicaopor nacionalidade, 1932-33. Sao Paulo.pp. 8-23. Sao Paulo, Secretaria da Agricultura. (1936). Recenseamento Agricola-Zootechinico realizado em 1934; Estudo dos Estabelecimentos Agricolas, Segundo a Nacionalidade dos Proprietaries e a Extensao Territorial. Sao Paulo, pp. 35- 198. Sao Paulo, Secretaria da Agricultura. (1949).Divisao da Propriedade Territorial Rural no Estado de Sao Paulo. Sao Paulo. Sao Paulo, Secretaria da Agricultura. 1915. “A Immigracao e as Condicoes do Trabalho em Sao Paulo.” Sao Paulo. 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Further reproduction prohibited without perm ission. 236 Smith, Roberto. (1990). Propriedade da Terra e Tramicao. Estudo da Formacao da Propriedade Privada da Terra e Transicao para o Capitalismo no Brasil. Sao Paulo: Brasiliense. Smith, T. Lynn. (1972). Brazil: People and Institutions. Baton Rouge: Louisiana State University Press. Sociedade Nacional de Agricultura. 1920. Immigracao. Rio de Janeiro. Stein, Stanley. (1961). Grandeza e Decadencia do Cafe. Sao PauSo: Brasiliense. Stolcke, Verena (1986). Cafemdtura, homens, mulheres e capital (1850-1980). Sao Paulo: Brasiliense. Sweigart Joseph E. (1980). “Financing and Marketing Brazilian Export Agriculture: The Coffee Factors of Rio de Janeiro, 1850-1888”. Ph.D. Dissertation, University of Texas at Austin. Taunay, Affonso de (1943). Historia do Cafe no Brasil. 15 vols. Sao Paulo: 1939- 1943. Taunay, Affonso de (1945). Pequena Historia do Cafe do Brasil. Rio de Janeiro: Departamento Nacional do Cafe. Tavares Bastos, Aureliano.(l 870) A Provincial estudo sobre a decentralizacao no BraziEMo de Janeiro. Teixeira, Isidore Gomes. (1909). Estatistica de Cafe e Cafesaes. Sao Paulo. Topik, Steven. (1987). The Political Economy of the Brazilian State: 1889-1930. Austin: University of Texas Press. Topik, Steven. (2000). “Coffee Anyone?” Hispanic American Historical Review. 80(2), p. 225-266. Toplin, Robert Brent. (1972). The Abolition of Slavery in Brazil. New York: New York University Press. Trinner, Gail D. (1994). “Banks and Brazilian Economic development: 1906-1930. Ph.D. dissertation. Columbia University. Trazzi, Oswaldo. (1986). Cafe e Industria, Sao Carlos: 1850-1950. Sao Carlos: Arquivo de Historia Contemporanea, UFSCar. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 237 Ulker, O. (1938). All About Coffee. Tea and Coffee publishing. Vasconcellos, lose Marcelino Pereira de. 1885. Livro das Terras. Rio de Janeiro: Editora Laemmert. Veiga Filho, Joao Pedro da. (1896). Estudo Economico e F'manceiro Sabre o Estado de Sac Paulo. Sao Paulo. Vergueiro, Jose. (1874). Memorial Acerca de Colonizacao e Cultivo do Cafe. Campinas. Versiani, Fiavio R. (1980) “Industrial Investment in an ‘Export’ Economy: The Brazilian Experience Before 1914” Journal of Development Economics vol. 7, 319-325. Villela, Annibal Villanova and Wilson Suzigan (1973). Politica do Govemo e Crescimento da Economia Brasileira, 1889-1945. Rio de Janeiro. Viotti da Costa, Emilia. (1982). Da Senzala a Colonia. Sao Paulo: Editora Ciencias Humanas. Wakefield, Edward Gibbon. (1834). England & America. A Comparison of Social and Political State of both Nations. New York: Reprints of Economic Classics. Wakefield, Edward Gibbon. (1849) A View of the Art of Colonization. London: John Parker. Washington Luis Papers, Arquivo Nacionai. Rio de Janeiro. Whately, Maria Celina. (1987). O Cafe em Resende no seculo XIX. Rio de Janeiro: Jose Olimpio. Willcox, Walter F. (1929). International Migrations, vol. 1 and vol. 2. New York: National Bureau of Economic Research. Wilson, T.C. 1972. Coffee. Vol. 6. Encyclopaedia Britannica, Inc., Chicago. Zanata, Odair. (1978). “Situacao Atual da Ocupacao de Terras Publicas” in: Encontros da UNB. Brasilia. Editora da Universidade de Brasilia. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 238 APPENDIX 1 - REGIONAL DIVISION OF SAO PAOLO AND THE BIOLOGY OF COFFEE Sao Paolo is a large state, roughly equivalent in total area to the size of Italy, half the size of France. Different from Rio, where the ‘hinterlands’ are very close to the coast, the hinterlands (or the western plateau) is very far from the coast, as shown in map 1. Sao Paulo is a hilly region, especially between the Paraiba valley, or ‘north’ of the State and the interior plateau, the ‘west’/” western 7hinterlands. The division we use here was adopted from Camargo (1954). Camargo published a study to analyze the relationship between several demographic and economic indicators in Sao Paulo, from 1836 to 1935. Two of the three volumes of this work contain all the raw data used in the project down to the ‘municipio’ (county) level. In addition to coffee production and total population figures, Camargo considered immigration into the state, the proportion of foreign bom to the population, and such indicators as the size of agricultural property, foreign landownership and the like. The division used in the present study was adopted from Camargo (1954, vol. Ip. 49-58), with the following changes:in order to better isolate the coffee producing zones of the state we have divided the “Central” region used by Camargo along an east-west line, thus creating a separate zone 3, (Sorocaba), to the south of region 4, (Central). We wanted to divide Camargo’s third zone in two: the coffee producing one (Central) and the non-coffee producing one (Sorocaba). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 239 During the Empire, we observed the relevance of the Paraiba valley, the capital and the Central zones. It is only in 1886 that the other zones started to appear once new municipalities were created. The pattern of institutional expansion along the frontier, shows how immigrants indeed conquered the west. Indeed, the division by municipios allowed us to observe the expansion of the frontier up to the borders with Minas Gerais and Mato Grosso. We noticed the creation of muncipios founded by immigrants during a period in which no other state in the Republic created so many new municipalities. Instead of including for each muncipio the date of its foundation, we included below the year only for those established between 1886 and 1934. The ones without the year were created before 1886. We then found that the number of municipios in Sao Paulo grew from 46 in 1850 to 121 in 1886 to 206 in 1920 to 261 in 1934. Of the 206 new municipios created between 1850 and 1934, 83% were in the western plateau and almost two thirds were created during the Republic. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 240 ffte State of SA O PA ULO m 43“ ■ Capital 2- Pw iba p iie f % tmtmhs C . C entfsj - i: MgflaW f^iilisla L 58. m i i a i m & ■ t s p ® - ? ■ * ftrara^uargiisfc & iofee&tf -§L A l l a S o f.Q € -a b a o a \ 1 0 . B a ix a ’S o r o t a l i a n a 11, Southern C eM R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 241 In the map, we have the 11 zones. In. brief, zone 1 is the capital zone, the commercial and financial center of the state. This zone is not well suited to large- scale agriculture and coffee does poorly in the inferior soils. Zone 2, on the northern of the capital, is Paraiba valley. As explained in the dissertation, the valley had its golden days during the Empire. While in 1886 it produced 21% of Sao Paulo’s coffee by 1905 its share declined to 5% and then to 2% by 1932. The third zone, centered around the town of Sorocaba, is not a coffee region, but had a tradition of diversified agriculture, including sugar and cotton. The western plateau started in zone 4, the Central zone, as we could observe from the creation of the municipios, or even the coffee cultivation (see chapter 4). Before coffee, this zone had sugar farms. Campinas, where the two major railroads converged (Mogiana and Paulista), was the third leading tranportation center in Brazil. Zone 5, the Mogiana (because of the raiload that cuts this zone), is key for the story of coffee and immigration. Located less than 50 miles of radius from Ribeirao Preto we noticed the increasing number of municipios where 80% of the landowners were immigrants. Ribeirao was considered to have the idea! soil for coffee and it may as well explain why we find high quality coffee being cultivated in this zone between 1905 and 1930. We found that in 1905, Ribeirao Preto had more foreign landowners than Brazilians (156 versus 105). R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 242 Zone 6 is the Paulista (because of the Compania Paulista railroad). The railroad developed in 1872 was indeed created to attend the demand of the coffee producers. This is also another zone of immigrants. In 1920, we found four municipios where immigrants owed two thirds of the rural lands. By 1886, the zones 4, 5 and 6 were well-developed zones of coffee production. These three areas constitute the ‘old’ west, the area most affected by the boom from the mid-1880s to the 1896. The difference between the told’ and the ‘new’ is related to transportation. The construction of the rail lines into the Central, Mogiana and Paulista came only after coffee was well established there. Beginning with the development of the Araraquaren.se zone, the opposite holds. While in zones 4, 5 and 6 coffee preceeded rails, in zone 7 the two activities (coffee and railroads) happened at the same time. In 1905, this zone had 16 municipios and 40% of the foreigner landowners were concentrated in four cities located next to each other. In brief, while in the told west’ (zones 4, 5 and 6)coffee came before the railroads, in the ‘new west’ (zones 7,8 and 9) coffee came after the trails. Indeed, the settlement of zone 8, the Noroeste, took place after the construction of the railroad with the same name. While the Sorocabana reached Baum in 1905 the west of Baum, was called in the maps ‘land inhabited by wild Indians’ (terra habitada por indios selvagens). The last zone of the plateau, zone 9, is the Alta Sorocabana. The Sorocabana railroad was constructed as far as Botucatu by 1886 and the area. Around the turn of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 243 the 20th century, the Sorocabana began to extend its tracks to the west and by 1909 it reached Salto and it stopped at the banks of Parana in 1922. The rail line and the region it served became known the Alta Sorocabana (to distinguish from the Sorocabana system). Between 1920 and 1934, in 28 out of the 30 new municipios created the population of immigrants was greater than that of Brazilians. Zones 4 through 9 of this division are usually referred as the ‘western plateau’, hinterlands. The natural conditions in the Western Plateau of Sao Paulo were excellent for coffee. Almost 80% of these zones had ideal land for coffee, known as ‘terra roxa’. Located within the southern tropic (Tropic of Capricorn), the area is far from the equator to escape the intense heat. Killing frosts are not frequent and yet the average temperature is not so high to require a cover shade trees. We found the use of shade in Ribeirao Preto, in part because they cultivate the bourbon type that had delicate seeds. Coffee is planted over the tops of the ridges to escape the freezing temperatures that occur in the valley bottoms. Zone 10 is called the “Baixa” or lower Sorocabana, after the railroad branch built through the area between 1900 and 1910, to connect the Brazilian states with Sao Paulo and points north. The Baixa Sorocabana lies south of the area climatically suitable for coffee, and hence, has never produced significant amounts of coffee. Zone 11, includes Santos, and we called the ‘southern coast’. The most important city is Santos mainly because of its port and its intense shipping business. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 244 It was mainly through, this port that coffee was exported and that the ships arriving from Europe with immigrants landed. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 245 Regional Division ©f Sao Paul© by municipio: 1830-1934 (The year means t i e foundation date. T ie ones created before 1886 are not dated) Region 1: CAPITAL 1. Capital 2. Cotia 3. Guamlhos 4. Itapecerica 5. Juqueri 1890 6 . Santo Amaro 7. Sao Bernardo 1889 Region 2 PARAIBA VALLEY AND NORTHERN COAST 1 . Aparecida 1928 2. Areias 3. Bananal 4. Barreiro 5. Buquira 6. Cacapava 7. Cachoeira 8. Campos do Jordao 1934 9. Caraguatatuba 10. Cruzeiro 11. Cunha 12. Guararema 1898 13. Guaratingueta 14. Igarata 15. Jacarei 16. Jambeiro 17. Jatai 1889 18. Lagoinha 19. Lorena 20. Mogi das Cruzes 21. Natividade 22. Paraibuna Region 2 (Cont.): 2 3 . Pindamonhagaba 24. Pinheiros 25. Piquete 1891 26. Queluz 27. Redencao 28. Salesopolis 29. Santa Branca 30. Santa Isabel 3 1 . Sao Sebastiao 32. Sao Bento do Sapucai 33. Sao lose dos Campos 34. Sao Luiz do Paraitinga 35. Sivelras 36. Taubate 37. Tremembe 1 89 6 38. Ubatuba 39. Vilabela Region 3 SOROCABA 1 . Angatuba 2. Aracariguama 3. Campo Largo 4. Guarei 5. Itapetininga 6. Pamaiba 7. Piedade 8. Pilar 1891 9. Porongaba 1 9 2 7 10. Sao Roque 1 1 . Sarapui 12. Tatui 13. Una Region 4: CENTRAL 1. American 1 9 2 4 2. Atibaia 3. Braganca Region 4 (Cont.): 4. Cabruva 5. Campinas 6. Capivari 7. Indaiatuba 8 . Itatiba 9. Itu 10. Joanopolis 1896 11. Jundiai 12. Monte Mor 13. Nazare 14. Piracaia 15. Piracicaba 16. Porto Feliz 17. Rio das Pedras 18. Salto 1889 19. Santa Barbara 20. Sao Pedro Region 5 MOGIANA 1. Altinopolis 1918 2. Amparo 3. Batatis 4. Brodosqui1913 5. Caconde 6. Cajuru 7. Casa Branca 8 . Cravinhos 1897 9. Franca 10. Grama 1925 11. Guara 1925 12. Igarapava 13. Itapira 14. Ituverava 15. Jardinopolis 1898 16. Mococa 17. Mogi Guassu 18. Mogi Mirim R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 246 Region 5 (Coat.) 19. Morro Agudo 1924 20. Nuporanga 1890 21. Orlandia 1909 22. Patrocinio do Sapucai 23. Pedregulho 1921 24. Pedreira 1896 25. Pinhal 26. Ribeirao Preto 27. Santa Rosa 1910 28. Santo Antonio da Alegria 1890 29. Sao Joao da Boa Vista 30. Sao Joaquim 1917 31. Sao lose do Rio Pardo 32. Sao Simao 33. Serra Azul 1927 34. Serra Negra 35. Sertaozinho 1896 36. Socorro 37. Tambau 1898 38. Tapiratiba 1928 39. Vargem Grande 1921 Region 6 PAULISTA 1. Anapolis 1897 2. Araraquara 3. Araras 4. Barretos 1890 5. Bebedouro 1894 6. Cajobi 1926 7. Colina 1925 8. Descalvado 9. Guariba 1917 10. Guaira 1925 11. Jaboticabal 12. Leme 1895 13. Limeira 14. Monte Azul 1914 15. Olimpia 1917 16. Palmeiras 17. Pirassununga 18. Pitangueiras 1893 19. Porto Ferreira 1896 Region 6 (cont.) 20. Rio Claro 21. Santa Cruz da Conceicao 1898 22. Santa Rita 23. Sao Carlos 24. Viradouro 1916 Region 7: ARARAQUAREN SE 1. Ariranha 1918 2. Bariri 1890 3. Barra Bonita 1912 4. Bica de Pedra 1913 5. Boa Esperanca 1898 6. Bocaina 1891 7. Borborema 1925 8. Brotas 9. Catanduva 1917 10. Cedral 1929 11. Dois Corregos 12. Dourado 1897 13. Ibira 1921 14. Ibitinga 1890 15. Itajobi 1918 16. Itapolis 1891 17. lau 18. Jose Bonifacio 1926 19. Matao 1898 20. Mineiros 1898 21. Mirassol 1924 22. Monte Also 1895 23. Monte Aprazivel 1924 24. Mundo Novo 1928 25. Nova Granada 1925 26. Novo Horizonte 1916 27. Pedemeiras 1891 28. Ribeirao Bonito 1890 29. Sao lose do Rio Preto 1894 30. Santa Adelia 1916 31. Tabapua 1919 32. Tabatinga 1925 33. Tanabi 1924 Region 7 (cont.) 34. Taquaritinga 1892 35. Torrinha 1922 36. Uchoa 1925 Region 8: NOROESTE 1. Aracatuba 1921 2. Avai 1919 3. Avanhandava 1925 4. Baum 1887 5. Birigui 1921 6. Cafelandia 1925 7. Coroados 1928 8. Duartina 1926 9. Galia 1927 10. Garcal928 11. GSicerio 1925 12. lacanga 1924 13. Lins 1919 14. Marilia 1928 15. Penapolis 1913 16. Pirajui 1914 17. Piratininga 1913 18. Presidente Alves 1927 19. Promissao 1923 20. Vera Cruz 1934 Region 9: ALTA SOROCABANA 1. Agudos 1898 2. Avare 3. Assis 1917 4. Bernardino de Campos 1923 5. Bocaiuva 1924 6 . Bofete 7. Botucatu 8. Campos Novos 9. Candido Mota 1923 10. Cerqueira Cesar 1917 11. Chavantes 1922 12. Conceicao do Monte Alegre 1896 13. Conchas 1916 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 247 Region 9 (cent.) 14. Espirit© Sant© Turvo 1896 15. Fartora 1891 16. Ipaussu 1915 17. listings 1896 18. Laraajal 1917 19. Lencoes 20. Maracai 1.924 21. Ole© 1917 22. Ourinhos 1918 23. Palmitai 1919 24. Paraguacii 1924 25. Pereiras 1S89 26. Piraju 27. Piramboia 1891 28. Platina 1915 29. Presidente Prudente 1921 30. Presidents Wenceslau 1926 31. Quata 1925 32. Salto Grande 191 i 33. Sapezai 1896 34. Santa Barbara do Rio Pardo 35. Santa Cruz do Rio Pardo 36. Santo Anastatic 1925 37. Sao Maimei 38. Sao Pedro do Turvo 1891 39. Tiete Region 10: BAIXA SOROCABANA 1. Apiai 2. Bom Sucesso 1886 3. Buri 1886 4. Capao Bonito 5. Capoeiras 1924 6. Iporanga 7. Itabera 1891 8. Itai 1891 9. Itapeva 10. Itaporanga 11. Itarare 1893 12. Ribeira 1910 Region 10(cont) 13. Ribeirao Branco 1893 14. Ribeirao Vennelho 15. Sao Miguel Arcanjo 1889 16. Tacfiiari 1925 17. Xiririca Region 11: SANTOS AND SOUTHERN COAST 1. Cananeia 2. Iguape 3. Itanhaem 4. Jacupiranga 1927 5. Santos 6. Sac Vicente R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 248 The Biology of coffee Coffee is believed to have been discovered in the Kaffa region of southwestern Ethiopia and first cultivated by Saudi Arabia some 530 years ago. Coffee comes from seeds that grow on tropicai evergreen shrubs or small trees. Coffee belongs to the genus Cqffea which contains more than 25 species mostly growing wild in the old world tropics (Wilson, 1972). Coffee is in the Family Rubiaceae with about 500 genera and 7000 species, principally subtropical and tropical (Heywood, 1993). Other important plants in this family include Gardenia, and Cinchona from which comes the anti-malarial quinine. Cqffea arabica accounts for the bulk of world production. Other coffee species grown commercially include C. canephora var. robusta (originally called C. robusta and native to the African Congo - Coffee Science Source, 2002) and C. liberica. The finest coffees are grown at elevations of 3000 to 6000 ft (915 to 1830 m). Although the trees normally grow to 30 ft (9 m) in height, they are frequently pruned down to a height of 15 ft (5 m) to make harvesting easier, the coffee seeds being collected by hand. Most coffee plants grow best under taller shade trees. They produce beautiful flowers that last but a few days. The beans are either rinsed in water or go through an elaborate “washing” process, are dried then often blended and roasted. Coffee contains an alkaloid called caffeine that serves as a stimulant. It is a popular beverage throughout the world. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 249 APPENDIX 2: METHODOLOGY FOR THE INDEX OF LEGAL CHANGE libecap established 15 categories that were commonly found in mineral right laws. To build the index of legal change for the mineral rights law in the Nevada Comstock mines, Libecap studied each statute, law or veridict to determine how many of the 15 categories were covered. Then within each category the provisions o f the statute or verdict were compared to previous laws. If these provisions were more detailed and precise in their definitions of rights, he assigned . 1 point for each category included. If the provision essentially repeated earlier legislation or ruling without changes in specificity, no points were assigned. The total points assigned to each state or verdict depended on the number o f categories covered and refined. The sum of points for all statutes passed in a year formed the index o f the annual increase in specificity o f mineral rights legislation (ACL, column I). The index has fifteen categories, seven related to the rights of individuals in working, staking and selling land and the remaining eight dealt with the enforcement structure required to protect those rights. Lifoecap’s categories: 1. Physical claim boundaries; 2. Actions which the claimant can take to protect his holdings from trespassers or other competitors; 3. Procedures for establishing a claim; 4. Provisions for the transfer of ownership; 5. Actions which must be taken to maintain the ownership o f a claim (including work requirements and the issue of abandonment); 6. Requirements for the formation of mining corporations and the power of such corporations over their members; 7. Requirements for the formation of mining partnerships; 8. Taxes: sharing mine revenue with the state 9. Duties o f judges in the enforcement o f mineral rights; R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 250 10. Duties of sheriffs; 11. Duties o f juries; 12. Duties of surveyors; 13. Duties of recorders of claims and mine records; 14. Duties of notaries and commissioners of deeds; 15. Provision for jails for punishing law violators; We adopted the Libecap’s index for land rights in Brazil but add some aspects we found important for land rights that were not relevant for mineral rights. To a certain extent, we preserved Libecap’s procedure to assign points for each law, statute or veredict, but we also admit the possibility of new laws constraining the development of property rights. In other words,, a value of 0 was assigned if one statute was simply repeating previous legislation, if It improved (explained better, in more detailed previous legislation), we assigned 1 point. However, if the dispositons of a new law worsened the previous legislation by creating constraints that, directly or not, hampered the development of property rights, we assigned a value o f-1. We first analyze each disposition and article in each legislation to to see which of the seventeen categories were covered. Then, within each category, the provisions of the statute were compared with previous laws. If those provisions were more detailed and precise In their definitions of rights, a point was assigned for each category Included. If the provision essentially repeated earlier legislation without changes in specificity, no points were assigned. If the disposition was precluding the previous legislation from being used without creating any other device we subtract one point from the category. The total points assigned to each statute depended on the number of categories covered and refined. The sum of points for all statutes passed in a year formed the index of the annual-increase-in specificity of the land R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 251 rights legislation, shown in column. 1. The cumulative specificities of mineral rights due to legislative actions listed in column 2 is the running total of the corresponding annual changes from column 1. In deciding whether a law refined one of the fifteen categories, Libecap does not use any general scale; instead he made an ordinal comparison within the context of existing laws. This ordinal ranking procedure can be illustrated with the changes in Brazilian land law with the procedures for establishing a claim. The first statute concerning this category was enacted in 1854. Article 25 and 26 of the Statute required the private claimant to request the appropriate authorities to measure the plot, as long it complied with the cultivation principle. This rale was given a value of 1 under the category “ procedures for establishing a claim”, since it was the first law outlining how to file a claim for land tenure. In 1858, a statute was enacted listing, with a great deal of detail, the procedures required to claim ownership of small plots. The 1858 statute is seen as a refinement of the 1854 statute, since the ‘procedures for establishing a claim’ became more definite for small plots in 1858 than in 1854. Therefore, we assigned one point for that category due to the 1858 statute. In 1895, another change in the same category was enacted. In brief, the law simplified the procedure to claim landownership by eliminating many intermediary steps that tended to delay the titling process. Thus a point was assigned for the 1895 legislation under that category. Yet, in 1900 a bill was passed which seemed merely to repeat an earlier requirement that the Land Registrar should be installed in all townships at the same day. Accordingly, the bill was given a 0 for that category. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 252 Index of legal change for land rights Categories 1. Procedures for claiming ownership on a land grant; 2. Procedures for claiming ownership on public land acquired through adverse possession; 3. Maximum size of a plot (land grand or posses); 4. Statute of limitations to claim ownership on. a plot of land; 5. Provision for use rights if the owner do not comply with the law; 6. Provisions for transfer of ownership; 7. Government incentives to reduce size of plots (any form of taxation?) 8. Measurement costs and fees; 9. Measurement procedures for public lands; 10. Concessions of public land; 11. Sales of public land; 12. Maximum size of public lands plots; 13. Duties of judges in enforcing land rights; 14. Duties of surveyors; 15. Duties of provincial presidents/governors; 16. Duties of land registrars in recording the claims and land records; 17. Provision for law violators; Changes in the 1850 Land law,number 601, September 18: 1. Law 601, September 18, 1850. Different from the US, public land in Brazil was always sold after being measured. Therefore, the sale price includes the measurement costs. Trespassers, who acquired public land acquired through adverse possession, however, did not have to pay for the public land. The only requirement was registration of the piece of land. Points by Category (-1, 0 or 1) C1=1 C2= 1 C3= 0 C4=Q (I assigned a 0 because the law is ambiguous. In article 2, it says that public land can only be acquired through purchase, in Art. 7 and 8, it says that the government will set the deadlines for measuring private land. The taw does not say that land acquired after 1850 through adverse possession could not be measured. We can interpret the law, saying that the statute of limitations expired when the law was enacted. Still, the index is not an interpretation of the law.) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 253 C5=1(Art.8. it says that in case the owner decides not to register his land, he still would be entitled to live in the part of the land that is being used, and the remaining unused land would become public). C6=1 (Art. 11. Says that the squatters who did not follow the law could not mortgage his land) 07=0 C8=1 (Art 11) Measurement costs: $0.02/acre ($0.Q6/hectare) Fees: ($2.8 for plots with an area less than 121 hectares and $0.02 (per extra hectare) +$2.24 (flat fee for registration)=$5.04 09=1 (Art 14) Not very defined since they didn’ t know what was public Sand. G10=1 (A rt. 12) C11=1 (Art. 14 § 2) (cost between $1.12 to $2.24 per hectare (or $0.45 to $0.97 per acre) to buy public land, including measurement costs). At the same time, the US sold land at $1.25 per acre. 012=1 (Art. 14 §1°) public land would be sold in plots of 121 hectares) C13=1 (Art. 2 § unico) 014=0 015=1 (A rt. 10, provincial president is the arbitrator in a disagreement and is the one who signs the title) 016=1 (Art. 13. Says that land registrars will be formed in each township) 017=1 (Art.2 and Art. 22) TOTAL POINTS: 13 2. Statute number 1318, 01/30/1854 (dispositions to execute the 1850 law); Points by Category {-1, 0 or 1) 01= 1 (Art. 23, specify which land grants do not need revalidation) 02= 1 (A rt. 24 specify which posses don’ t need revalidation. Art 24. §1§, 2 and §3) 03= 0 04=1 (Art. 20) The posses established after this statute should not be entitled to a title. I t should become public land. 05=0 06=1 (A rt. 25 definition of legitimate title and A rt 26) 07=0 08=0 09=1 (A rt. 10,11, 64, 54, 66) These articles established a detailed procedure on how to sell public land, to whom will go the procedures and what to do with unsold land). 010=1 (A rt. 72, 73, 74, 75, 76, 77, 78, 79, 80, 81) Describes in detail the procedures on what is being considered reserved land. 011=1 (A rt. 67, 68, 69,70 and 71) 012=1 (A rt. 10, provinces will be divided according to the number of measurement districts required in proportion to the amount of public land. (Art.11: Role of Inspector in charge of measuring public land), Art. 12 (size of R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 254 public land); (Art. 17: measurement starts with public land) Art 15: creation of maps; Art 18: public land inside private land can be measured. C13= 1 (Art, 19: juiz comissario and municipal judge in charge of solving disputes) (Art. 30: create the figure of ‘ juiz comissario’ ) Art 31: the person nominated by the provincial president for this position cannot decline the offer in any instance. C14=1 (Art 13: surveyors will be paid per acre measured, no fixed wage. Art. 35: surveyors should be recruited in engineer schools or in the S V filitar school) Art. 11: surveyors are nominated by the provincial president) C15=1 (art. 28: judges, sheriffs should find out private lands to be validated) C16=1 (Art. 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104) The land registrar was under the Federal government jurisdiction 017=1 (art. 29 and 31) TOTAL POINTS: 13 3. Regulation from 5/8/1854 (set temporary rules to measure public lands); Points by Category (-1, 0 or 1) C1=0 C2=0 C3=Q C4=0 C5=0 C6= 0 C7=0 C8=0 C9= 1 (Art. 2, paragrafo unico). This is the first act to create a procedure to measure land. If is very vague and confusing. C10=0 C11=0 C12=0 C13=0 C14=1 (art 3) Surveyors will measure public land C15=0 C16=0 C17=0 TOTAL POINTS: 2 4. Portaria 385 12/19/1855: Public Land Federal Office (Reparticao Geral das Terras Publicas) specifies the technical details for public land measurement, Points by Category (-1, 0 or 1) C1=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 255 C2=0 C3=0 C4=0 C5=0 C6=0 C7=0 C8=0 C9=1. The measurement procedures are more specific than the 1854 temporary regulations. The Saw describes in great detail the procedures to measure and isolate public land (surveyors have to specify rivers, roads, type of soil,) C10=1 (After measuring the area, surveyors had to write a report specifying if there was any land to be given to the Navy) C11=1 (The reason I gave 1 is because the price of public land was set by the report prepared by the measurement commission. Price of public land varied according to to the type of soil, access to the market and other conditions that were detailed in the report) C12=0 (though the act says that the maximum size is 121 hectares and that the surveyors had to divide the land in according to this size) C13=0 C14= 0 ( There is nothing new in the role played by the surveyor) C15=G C16=0 (the act says that the Inspetor geral has to produce a detailed map of public lands in each state. This would be used to sell public land. However, the registrar for public land are composed by these maps whereas for private land, the claims should be filed to initiate the process of obtaining a title.) C17=0 TOTAL POINTS: 3 5. Aviso 4/10/1858: For ‘ posses’ with an area not exceeding 250,000 square bracas (1 square braca =4.8sq meteres) (minimum size of public plots sold by the government) the measurement costs were paid by the government. This 'aviso’ was suspended in 1881; Points by Category (-1, 0 or 1) C1=0 C2=1 (it is an improvement from the 1854 law because the measurement costs for ‘ small’ owners were too considered to be too high. This is a measure to foster registration) C3=1 (! see that as a change from past laws given that this is the first time the government is paying the measurement costs for small plots acquired through adverse possession.) C4=G C5=0 C6=0 C7=0 C8=1 (The government paid the measurement costs but not the fees for the posses) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 256 C9=0 C10=0 C11=0 C12=0 C13=0 C14=0 C15=0 C16=0 C17=0 TOTAL POINTS: 3 8. Statute (decreto) number 1067, 07/28/1860: created the Agriculture Ministry and extinguished the Public Lands Federal Office (Reparticao Geral das Terras Publicas) and transferred to the provinces the role of updating the land registration (through the ‘reparticao especial’ in each province). The Agriculture ministry is a positive institutional innovation. Mainly because it decentralized the land registration process to the provinces as well as the colonization offices. With the end of the Reparticao gera! das terras publicas, the process of land demarcation almost stopped. And as we will see it is only in 1876 with a deep reform in the land and colonization institutions that the demarcation process starts again. Points by Category (-1, 0 or 1) C1=G C2=0 C3=0 C4=0 C5=0 C6=Q C7=0 C8=0 C9=Q C10=0 C11=0 C12=0 C13=0 C14=0 C15=0 C16=1 (with this change the land registration was transferred to the provinces, at the ‘ special offices’ (reparticoes especiais). C17=0 TOTAL POINTS: 1 7. Law 1237, 9/24/1864: Mortgage Law: the law establishes that properties with a clear title could be mortgage. In case the debtor foreclosed the mortgage, R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 257 he had to accept the land as part of the payment (‘ forced adjudication’ ). The process of foreclosing involved a peace judge that assigned three appraisals to value the property. The law says that the appraisals’ value could not be lower than the value of the original loan. There was only one auction, and if the bids were not high enough to cover the appraised value, the creditor would have to accept the land as the payment for the mortgage. The law also established that in order to sell, mortgage or donate the land the title had to be listed in a public registry. It was not enough (meaning, the title could not be mortgage) if the title was registered in a notary public. Points by Category (-1, 0 or 1) C1=0 C2= 0 C3=0 C4=0 C5=0 C6=1 (It says that land can be sold only if it it is registered In public land registrations (transcricao publica dos titulos). Land to be sold, mortgage or given as bequest, that had only the notary public certified (reparticoes publicas). C7=0 C8=0 C9=0 C10=0 C11=1 (here we have the ‘peace judge’ as the intermediary between creditor and debtor. Because the judge was part of the community, the appraisals appointed to value the property were the debtor’s friends). C12=0 C13=0 C14=Q C15=0 016=1 (well, I assigned 1 because the condition for mortgage was that the land had to be registered in a public land registrar to have the associated land record) C17=0 TOTAL POINTS: 2 8. Amendment number 515, 11/25/1868 (included slaves as collateral): This amendment does not change the conditions required to have land mortgaged. Points by Category (-1, 0 or 1) C1=0 C2=0 C3=0 C4=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 258 C5=0 C6=0 C7=0 C8=0 C9=0 C10=0 C11=0 C12=0 C13=0 {214=0 C15=0 C16=0 C17=0 TOTAL POINTS: 0 9. Amendment number 534, 12/5/1888 (defined that concessions of public land could only be mortgaged if the land was registered in a land registrar. There was no judicial value for titles of public land that were obtained in notary publics (reparticoes juridicas). Points by Category (-1, 0 or 1) C1=0 C2=Q C3=Q C4=0 C5=Q C6=1 (now public land acquired through concessions or purchases couid also be mortgaged) C7=0 C8=0 C9=0 C10=0 C11=0 C12=0 C13=0 C14=0 C15=0 C16=1 (to mortgage public land, the owner had to register it in the land registrars and not only the notary public) C17=0 TOTAL POINTS: 1 10. Regulation number 8129, 2/23/1876 (decreto): Agriculture Ministry created the Federal Land and Colonization Office (Inspetoria Geral de Terras e Colonizacao). This was a federal office composed by the former Federal R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 259 Land Commission Office (Comissao Geral das Terras) and the Official Colonization Agency (Agenda official de Colonizacao). In the provinces, the regulation extinguished the special offices (reparticoes especiais) and created the Special Land and Colonization office (Inspetoria especial de terras e colonizacao). This provincial office had two sub-branches: the colonization agency (in charge of monitoring the colonies built by the imperial or provincial government) and the measurement commission (in charge of measuring land). Clearly, the regulation is trying to simplify the measurement process, by reducing the number of offices involved and is also trying to decentralize the process at a provincial level. The provincial president had the same degree of power as before, by appointing the ‘ judges’ and the surveyors, and by being the person who signed all the land titles. Points by Category (-1, 0 or 1) C1=0 C2=0 C3=0 C4=Q C5=0 C6=0 C7=0 C8=0 C9=0 C10=0 C11=0 C12=0 C13=0 C14=1 (now the surveyor had the power to be the comissario judge) C15=0 C16=1 (create the general statistical regitrar of public land) C17=Q TOTAL POINTS: 2 11. Aviso, October 4, 1873: Land acquired through adverse possession after 1854 could be legalized after paying the measurement and administrative fees. Points by Category (-1, 0 or 1) C1=0 C2=1 C3=1 C4=1 C5=0 C6=1 C7=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 260 G8=1 C9=0 C10=0 C11=0 C12=Q C13=0 Cl 4=0 C15=0 C16=1 C17=0 TOTAL POINTS: 6 12. Law 3272, 10/5/1885. Mortgage law. It excluded the forced adjudication concept, and made the foreclose process easier for the creditor. Points by Category (-1, 0 or 1) C1=0 C2=0 C3=0 C4=0 C5=0 C6=1 C7=0 C8=Q C9=0 C10=0 C11=0 C12=0 C13=1 C14=1 C15=1 C16=1 C17=1 TOTAL POINTS: 5 13. Brazilian Constititution. 1891. Article 93, transferred from the Union to the states the jurisdiction over land. Points by Category (-1, 0 or 1} C1=0 C2=0 C3=0 C4=0 C5=0 C6=0 C7=0 C8=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 261 C9=0 C10=0 C11=0 C12=0 C13=0 C14=0 C15=0 C16=0 C17-0 TOTAL POINTS: 0 14. Sao Paulo state Law 323, 6/22/1895: posses and sesmarias, even without cultivation, could be legitimate, as long as the ‘ owners’ had lived there until the law was enacted (there is no minimum period). The owners had a 10 year period to legalize their lands, starting in 1895. Created the Sao Paulo Land Register. Public land prices: $2 per hectare (4.84/acre) and $4 per hectare ($9.68/acre) Measurement costs: $1.68 per hectare (up to 2,000 hectares) and $1.4 hectare for any area above 2,000 hectares. To acquire a title: $5 {flat fee). This law is much more clear than the 1850 one. It accepts the parish priests registrars as a proof of ownership (the registration with the priest, under tie 1850 law, did not grant the title for the owner). Points by Category (-1, 0 or 1) C1= 1 (art. 31,32, 33, 34, 35, art. 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 212, 213, ...) C2=1 (because it became easier to register the plots, you didn’ t even need to prove if the title was not fake) C3=1 (posses: besides the ‘ productive land’ squatter can legalize up to 1,000 hectares of contiguous public land, art. 49 §1°) C4=1 (yes, whoever had acquired land after 1854 and before 1895 was entitled to receive a title) C5=0 (no, the law is clear: if you don’ t register your Sand, it will become public and Sao Paulo would only pay for the improvements made in the land) C6=1 (the procedure described in art. 97 is really simple: if the owner did not register his land (in the municipal land registrar) he could not mortgage the land. C7=0 C8=1 (table b: cost $1.68 up to 2,000 hectares and plus $1.4 if the area is greater than 2,000 acres, and $2.5 for the title.) C9=1 (art. 145, 146, 147, 148, 149, 150, 151, 152,153, 154 until art. 197) C10=1 (Capitulo I! art. 312 until 318) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 262 C11=1 (yes, and it seems very dear: Titulo V I art. 288 until art. 298, also: “ Seccao II” “Da venda direta”: art. 299 until art. 311) C12=1 (it seems according to art. 325 that public land now had no maximum size. It would be sold for $1.5 per hectare without previous measurement. It is the owner responsibility and not the state to claim for measurement. Therefore, public land was sold without previous measurement. In the price, the government did not include the registration and measurement costs) G13=1 (there is no more 'juiz comissario’. Now, only if the owner has a litigation or wants to start one is that the civil judge will be asked to participate in the process. Also, the judges’ roles are restricted in imposing punishment). C14=1 (the sheriff (highest and better paid position in the Land Offices) was a public officer that had to have an engineering degree as well as his technical assistants.; art. 12,13 and 14 detailed their roles) C15=0 (! didn’ t see the role of the governor here) C16=1 (they created the municipal land registrar art. 88-127. Seen as an improvement from the 1850 land law because the private owner would have to start registering the land if he intended to have it measured and then come back, after the measurement to get the paperwork.) G17=1 (art. 338-366) TOTAL POINTS: 14 15. Law 545, 8/2/1898. Posses acquired before 1878 that had a title of ownership prior to 1878 would be automatically legitimized. The same procedure applied for ‘ private’ land that was being productively used since 1868. In other words, for posses acquired before 1868 without any proof of ‘legal’ ownership, the owner would be eligible to start the legitimization process that would, in turn, give a title to the land. Posses that belonged to only one owner (posses de primeira ocupacao) that were created/established until 6/22/1895 could start the legitimization process. The legalization/legitimization of posses de primeira ocupacao acquired until 1895 that had never been sold (posses de primeira ocupacao). Points by Category (-1, 0 or 1) G1=0 C2-1 (I assigned a 1 because the law is making even simpler for the squatter to register the land) C3=1 (in a sense, this is the first law saying that in the absence of an ownership proof the squatter can still acquire 2000 hectares of land.) C4= 1 (the squatter C5=G (art. 4 is clear: if owner choose not comply with the law, his land will be auctioned in 3 years) C6=1 (art. 7: the law says that the lands without a title cannot be sold because they will be cleared in the mortgage regitrar, the same place that the owner had to go register their land) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 263 C7=0 C8=0 (refers to Law 323) C9=0 C10=0 C11=0 C12=Q C13=0 C14=0 C15=0 C16=0 C17=0 I assigned many zeros because the law does not display a significant change of conduct with respect to the Law 323, from 1895. TOTAL POINTS: 4 16. Sao Paulo State, provision (decreto) number 734,1/5/1900. Regulate the Municipal land registry (the public registry had to installed in all the comarcas at the same day) and the sale of public land. Points by Category (-1, 0 or 1) C1=0 C2=Q C3=0 C4=Q C5=0 C6=0 C7=0 C8=0 C9=0 C10=1 C11=1 C12=1 C13=1 C14=0 C15=1 C16=1 C17=1 TOTAL POINTS: 7 17. Sao Paulo State provision (decreto), number 786, 5/22/1900. Set the day when all the comarcas would receive their public land registry. Points by Category (-1, 0 or 1) C1=0 C2=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 264 C3=0 C4=0 C5=0 C6=0 C7=0 C8=0 C9=0 C10=0 C11=0 012=0 013=0 C14=0 C15=0 C16=0 C17=0 TOTAL POINTS: 0 18. Sao Paulo Executive decree number 1090, 01/09/1903. imposed a tax of two thousand mil reis ($480 USD) for each alqueires or fraction thereof of land planted in coffee for the first time. Oldgroves or dead trees in existing groves could be replaced without penalty. By prohibiting planters from opening up new coffee groves, the law was restricting the practice of interrow cropping by the colonos. Points by Category (-1, 0 or 1) C1= 0 C2=0 C3=G C4=0 C5=0 C6=0 C7=-1 C8=0 C9=0 C10=0 C11=0 C12=0 C13=-1 014=0 C15=-1 C16=0 G17=-1 TOTAL POINTS: -4 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 265 19. Sao Paulo decree number 1458, 4/10/1907, Immigration law. The 334 articles were divided in five parts: immigration, colonization, offices to enforce the law, creation of a permanent immigration fund and general dispositions. In Sao Paulo, the government created a labor agency to allocate the immigrants and abroad, it increased the number of offices and the amount spent with marketing Sao Paulo. The law created ‘nurseries’ (‘ viveiros’) where immigrants were granted land. Immigrants were granted first priority in these settlements. The law authorized the granting of subsidized credit to immigrants but not to Brazilians. Likewise, the law allowed the government to buy private land in the hinterlands to be titled and granted to subsidized immigrants. Points by Category (-1, 0 or 1) C1=0 C2=0 C3=1 C4=1 C5=0 C6=1 C7=1 C8=1 C9=1 C10=1 C11=1 C12=1 C13=1 C14=1 C15=1 C16=1 C17=0 TOTAL POINTS: 13 20. Sao Paulo State Law 1844, 12/27/1921. A H the squatters without a title that were living in their lands until 1921 could obtain a title to their lands. Also, those who had any type of proof to show ownership. The law legalized all the posses and sesmarias that were illegal since 1895. The law granted public land for free. More important, the law offered subsidized credit and other advantages for landowners who were willing to divide their properties. Extinguish the figure of the ‘ comissario judge’ that represented the political interests of each region. Instead, the regular judge was the new arbitrator. Points by Category (-1, 0 or 1) C1= 1 (it says that the grant will become public land in 1930, and the owner cannot do anything to change it. This is the first time that the law says that land grant would become public land) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 266 C2=1 (I assigned a value of 1 because the law was in fact, giving land for free. The procedures could not be easier. Claim ownership and register the piece of land.) C3= 1 (the maximum size was valid for posses not for land grants) C4=0 C5=0 C6=G (not that the law does not include it. I t’s just that I don’ t see any improvement) G7=1 (well, this is the first law to give tax breaks and subsidize credit for farmers who divide their plots with immigrants) C8=1 (yes, measurement costs paid by the state) C9=0 (though the law includes the procedures, but no major innovation) C10=1 (yes, the law gives public land for free) C11=0 (nothing new) C12= 0 (same thing: 121 hectares) C13=1 (the ‘ comissario judge was out and the regular judge was back) C14=1 C15=1 C16=1 C17=0 TOTAL POINTS: 10 Land Laws in Minas Gerais: 1890-1930 fi used the legislation provided in Cardozo (19S4, vol. 2, 272-281) and Linhares (Vol. 4, p. 1302-1310 to understand some dispositions) Minas Gerais state law 289, 8/27/1899: granted public land for free but did not allow the owner to sell or mortgage the plot (usufruto). Land in the hands of private claimants after 1854and before 1898 could receive a title. However, claimants were required a witness to show that they indeed lived in the land. Likewise, to start the whole procedure claimants had to show that the land was being used for productive purposes (Sao Paulo dropped this requirement and in my view that’s why people registered their lands, even with higher measurement costs). Minas did not accept the parish priest as a proof of previous ownership. Instead the state required: two witness (could not be blood related or women), and if the parcel was acquired though purchase the purchasing proof. The law has 345 articles divided in 15 parts (longer than the Sao Pauio and much more complicated), it seems to me that the law is trying to incentive the creation of small properties and that is why the legislators preserved the requirement that the land had to be used for productive purposes. The 1850 land Saw proved that this requirement did not work to increase land registration. Points by Category (-1, 0 or 1) C1= 1 (artigos 40, 43,46, 57, 59, 80, 61) C2=1 (artigos 41, 44, 55, 58, 63, 64) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 267 C3=Q (Why? ! did not find any articles saying: ‘ there is no maximum size for the private plots” . And I found in Sao Paulo). C4=1 (yes, before 1898 and after 1854) C5=1 (articles 85,66, 87, 88 explain that pubfic land could be be granted for free. However, they are referring to ‘public land’ (usufruto). Either way, the law is dear that those who did not register the land until in five years (until 1904) the state will take the land, becoming then public land) C6=0 (well, there is no provision (how to transfer) C7=0 (the law does not indude any) C8=1 ((table 2: cost $1.9 up to 1,000 hectares and plus $2.3 if the area is greater than 1,000 acres, and $4.5 for the title. Seems expensive.) C9=1 (art. 154, 186, 176, 184, 194, 203, 207, 219, 228, 242 units! article 298) C10=1 (articles 65,66, 67, 68. They did not have provision for granting public land for colonization companies). C11=0 (say that it will not start before 1904, so it seems that public land will not be measured until 1904?) C12=0 C13=0 (allowed the chief of the police to assume the role of the judge. It says is very vague and does not limit the power of the police/judge, it seems that they can do almost anything) C14=1 (the judge/police can also work as the surveyors) C15=0 C16=0 C17=0(no, if you don’ t register your land, you lose it, that’ s all. Again: it’s zero because the law does not explicitly say: “ people w ill not be punished if they don’ t register their lands” ) TOTAL POINTS: 9 2. M G state law 1351, 8/21/190G. land tax. Clearly, rural properties smaller than 121 hectare did not pay the tax. It says that the land cannot be sold or mortgaged if the owner does not pay the tax. Land tax is valid for both: rural and urban land. The law explains that properties that already obtained a title had to pay the land tax to be transferred, mortgaged or sold. Points by Category (-1, 0 or 1) C1=0 C2=0 C3=0 C4=0 C5=0 C6=0 C7=1 C8=1 C9=0 C10=0 C11=0 C12=0 C13=0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 268 C14=0 C15=0 C16=0 C17=1 (punishment is that the Sand couid not be sold) TOTAL POINTS: 03 3. Aviso 675, 9/12/1916. S ays that the owners who had a piot of land prior to 1899 would have until 1918 to register their lands (extended the deadlines from 1899 to 1918). Points by Category (-1, 0 or 1) C1= 1 C2=1 C3=0 C4=0 C5=0 C6=0 C7=0 C8=0 C9=0 C10=0 C11=0 C12=0 C13=0 C14=0 C15=0 C16=0 C17=1 TOTAL POINTS: 03 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 269 Table 1: Annua! Changes of the Brazilian Land Law: The Empire Period (1850-1889) Annual Increase in precision of land Y ear rights due to statutes Total precision of land rights (TPL)- tegistativea Number of land rights law passed 1850 13 13 1 1851 0 13 0 1852 0 13 0 1853 0 13 0 1854 15 28 2 1855 3 31 1 1856 0 31 0 1857 0 31 0 1858 3 34 1 1859 0 34 0 1860 1 35 1 1861 0 35 0 1862 0 35 0 1863 0 35 0 1864 2 37 1 1865 0 37 0 1866 0 37 0 1867 0 37 0 1868 0 37 1 1869 0 37 0 1870 0 37 0 1871 0 37 0 1872 0 37 0 1873 6 43 1 1874 0 43 0 1875 0 43 0 1876 2 45 1 1877 0 45 0 1878 0 45 0 1879 0 45 0 1880 0 45 0 1881 0 45 0 1882 0 45 0 1883 0 45 0 1884 0 45 0 1885 5 50 1 1886 0 50 0 1887 0 50 0 1888 0 50 0 1889 0 50 0 (a) Computed a s a tunning total of column 1, R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 270 Table 11 Annual changes in the Sao Paulo Land Saw (1890-1930) Annual Increase in Total precision of Number of precision of land land, rights (TPL)- land rights rights due to statutes legislative3 law passed Year (ACL)___________________________________________ 1890 0 50 0 1891 0 50 1 1892 0 50 0 1893 0 50 0 1894 0 50 0 1895 1 4 64 1 1896 0 64 1 1897 0 64 0 1898 4 68 1 1899 0 68 0 1900 7 75 2 1901 0 75 0 1902 0 75 0 1903 -4 71 1 1904 0 71 0 1905 0 71 0 1906 0 71 0 1907 1 3 84 1 1908 0 84 0 1909 0 84 0 1910 0 84 0 1911 0 84 0 1912 0 84 0 1913 0 84 0 1914 0 84 0 1915 0 84 0 1916 0 84 0 1917 0 84 0 1918 0 84 0 1919 0 84 0 1920 0 84 0 1921 10 94 1 1922 0 94 0 1923 0 94 0 1924 0 94 0 1925 0 94 0 1926 0 94 0 1927 0 94 0 1928 0 94 0 1929 0 34 0 1930 0 94 0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 271 Table 1,2 Annual changes la Minas Gerais Land law (1890-1930) Annual C hange in precision of land rights Y ear^ue to stsM e s Total precision of land rights (TPL)- legislativea Number of land rights law passed 1890 0 50 0 1891 0 50 0 1892 0 50 0 1893 0 50 0 1894 0 50 0 1895 0 50 0 1896 0 50 0 1897 0 50 0 1898 0 50 0 1899 9 59 1 1900 3 62 1 1901 0 62 0 1902 0 62 0 1903 0 62 0 1904 0 62 0 1905 0 62 0 1906 0 62 0 1907 0 62 0 1908 0 62 0 1909 0 62 0 1910 0 62 0 1911 0 62 0 1912 0 82 0 1913 0 62 0 1914 0 62 0 1915 0 62 0 1916 3 65 1 1917 0 65 0 1918 0 85 0 1919 0 65 0 1920 0 65 0 1921 0 65 0 1922 0 65 0 1923 0 65 0 1924 0 65 0 1925 0 65 0 1926 0 65 0 1927 0 65 0 1928 0 65 0 1929 0 65 0 1930 0 65 0 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 272 R aw Data Used in the OILS Regressions (tables 6.12 and 6.13) Year ACL a TPL b Immigration to Brazil Immigration to Sao Paulo Slave Populationc Coffee Exportsd Terms of Trade e 1850 13 13 2,072 22 600,483 2,684 128.9 1851 0 13 4,425 98 600,483 3,452 136.5 1852 0 13 2,731 1,023 600,000 3,936 142.3 1853 0 13 10,935 765 600,000 4,041 128.9 1854 15 28 18,646 850 508,731 4,894 166.7 1855 3 31 11,798 2,200 508,731 5,547 158.9 1856 0 31 14,008 1,123 508,731 5,862 178.8 1857 0 31 14,334 823 508,731 5,518 184.2 1858 3 34 18,529 565 508,731 5,082 184.2 1859 0 34 20,114 124 508,731 5,815 161.1 1860 ij 35 15,774 145 508,731 7,427 2Q0.2 1861 0 35 13,003 276 508,731 7,411 191.4 1862 ■ 3 35 14,295 112 508,731 6,229 169.3 1863 0 35 7,642 134 508,731 6,173 155.7 1864 2 37 9,578 10 508,731 6,648 163.9 1865 0 37 8,422 126 508,731 6,764 148.3 1866 0 37 7,699 155 508,731 6,711 135.2 1867 0 37 10,842 1,000 508,731 7,431 135.2 1868 0 37 11,311 200 508,731 7,114 147.5 1869 0 37 11,527 152 508,731 6,224 119.4 1870 0 37 5,158 159 508,731 6,SOS 129.1 1871 0 37 12.431 83 508,731 7,469 131.3 1872 0 37 19,219 323 361,236 9,593 121.5 1873 6 43 14,742 590 361,236 11,9 95 160.5 1874 0 43 20,333 120 361,236 12,744 179.1 1875 0 43 14,590 3,289 361,236 13,463 167.6 1876 2 45 30,747 1,303 361,236 12,583 199.4 1877 0 45 29,468 2,832 361,236 11,526 189.4 1878 0 45 24,456 1,678 361,236 12,056 177.5 1879 0 45 22,788 953 361,238 12,025 176.0 1880 0 45 30,355 613 381,236 11,421 216.2 1881 0 45 11,548 2,705 361,236 10,579 194.2 1882 0 45 29,589 2,743 361,236 10,185 155.9 1883 0 45 34,015 4,912 361,236 11,249 123.7 1884 0 45 24,890 4,888 381,236 12,411 148.1 1885 5 50 35,440 7,630 361,238 11,406 148.6 1886 0 50 33,486 9,534 268,488 12,107 139.0 1887 0 50 55,965 32,110 268,488 14,230 160.5 1888 0 50 133,253 91,826 123,987 10,857 224.9 1889 Q 50 65,246 27,694 0 18,963 220.8 R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 273 Raw Pata Used in the OLS Regressions (tab! Y ear ACL a TPL b Immigration to Brazil Immigration to Sao Paulo Slave (Coffee Population “ Exports d Terms of Trade e 1890 0 50 107,474 38,291 ol 17,850 214.7 1891 0 50 218,760 T08,688 0j 17,561 202.4 1892 0 50 86,203 42,061 ol 22,028 205.4 1893 0 50 134,805 81.745 0} 21,712 245.4 1894 14 64 60,984 48,947 O j 20,884 224.0 1895 0 64 167.618 139,998 g| 22,385 216.0 1896 0 64 158,132 99,010 0 19,663 189.0 1897 4 68 148,362 98,134 ol 18,506 148.1 1898 0 68 78,109 46,939 O f 13,830 141.9 1899 7 75 54,629 31,172 ol 14,459 137.5 1900 Q 75 40,300 21,038 oi 18,889 139.0 1901 0 75* 85,306 70,348 0] 23,979 125.0 1902 0 75 52,204 37,831 °l 20,327 124.8 1903 -4 71 34,062 16,553 0| 19,076 128.4 1904 0 71 46,164 23,761 0i 19,958 157.0 1905 0 71 70,295 45,839 of 21,421 162.8 1906 0 71 73,652 46,214 r~~~ of 27,616 148.6 1907 13 84 67,787 28,900 0 28,559 133.9 1908 0 84 90,536 37,278 0 23,039 128.7 1909 0 84 84,090 38,308 .................. t 33,475 162.8 1910 G 84 86,751 39,486 of 26,696 195.7 1911 0 84 133,575 61,508 o { 40,401 193.3 1912 0 84 177,887 98,640 ol 46,558 193.8 1913 0 84 190,333 116,640 of 40.779 145.1 1914 0 84 79,232 46,624 ol 27,000 122.5 1915 0 84 30,333 15,614 oj 32,191 93.4 1916 0 84 31,245 17,011 o f 29,281 90.4 1917 0 84 30,277 23,407 oi 23,054 68.9 1918 0 84 19,793 11,447 ol 19,041 67.2 1919 10 94 36,027 16,205 0 66,081 103.5 1920 0 94 83,042 32,484 oj 40,456 76.6 1921 0 94 58,476 32,678 oi 37,067 63.2 1922 0 94 65,007 31,281 oj 39,545 104.1 1923 0 94 84,549 45,240 oj 44,182 117.1 1924 0 94 96,052 56,085 ol 65,747 161.6 1925 0 94 82,547 57,429 oj 74,032 162.9 1926 0 94 118,686 76,796 0) 69,582 159.9 1927 0 94 97,974 61,607 oj 62,689 134,4 1928 0 94 78,128 40,847 oj 69,701 164.4 1929 Q 94 96,186 53,362 0 67,307 160.9 1930 0 94 62,610 30,924 o| 41,179 100.0 es 6.12 and 6,13: continuation) R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 274 Raw Data used for the OLS R egressions fcontinuation). Notes: (a) ACL is the annual changes of the law. (b) TPL is the total precision of the law, a running sum of the ACL. {c) slave population is the number of slaves in the coffee provinces of Sao Paulo, Rio de Janeiro and Minas Gerais, (d) Measured in 1,000 british pounds, (e) The base year for the terms of trade is 1930. Sources: For ACL, Colecao de Leis e Decretos do Imperio Brasiieiro, Colecao de Lei e Decretos do Estado de Sao Paulo. For Immigration to Brazil: Carneiro (1950), p. 80. For immigration to Sao Paulo: Vasconcellos (1941), quadra A-1; For Coffee exports: Separata do Anuario Estatistico do Brazil 1939/40,IBGE, p. 84. For Terms of trade: Bacha (1992), Appendix table 1-10. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 275 APPENDIX 3: METHODOLOGY OF THE RURAL CENSUSES: SAO PAULO AND BRAZIL, 1905-1930 The first agricultural census in Brazil was implemented by the State of Sao Paulo (Agriculture Secretary) in 1905 (decreto 1.323, January’ 1, 1905). Through a set of questions the researchers obtained information, among other things, about the rural owner, the nationality of the owner, the number of workers in the rural area and the type of culture practiced in each rural property. In 1905, Sao Paulo was divided in 7 districts.1 6 9 In each district, the Agriculture Secretary had employees that were sent to the rural areas for at least one year to collect the data. According to Pino (1997), (1999), the rural property was going to be included in the ‘map of the district’ if the owner had a title on the land.1 7 0 The author explained that the Sao Paulo censuses were implemented by a large team of people and the method of sampling the population (random sample) was not officially adopted. Indeed, it is not until 1958 that the census in Sao Paulo started to be done by random samples, with a different methodology. Until 1936, there were two concepts used to define the agricultural units: rural property (“propriedade rural”) and rural establishment (“estabelecimento rural”). According to Pino (2002): 1 6 9 In our division of Sao Paulo we used ‘ zones’ instead of districts because the former is more flexible to changes whereas the latter in not. Districts have a geographical and a political role in the development o f states, 1 7 0 Font (1990, p. 284) argued that the censuses until 1930 in Brazil and in Sao Paulo might have excluded the small landowners who did m i have a title on the land bat were cultivating coffee, as early as 1905. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 276 “Rural property is all She continuous area that entice land rights (title or ‘escritura) registered according to “Bureau of Land Registrar” as productive unit, located in the rural zone or used for rural activities.” The rural property was the criteria used for Sao Paulo censuses between 1905 and 1936 (Pino, 1999, Pino 2002). In all the Sao Paulo censuses (between 1905 and 1936), we have the following information: total number of rural properties; number (and area) of properties owned by Brazilians; number (and area3 7 1 ) of properties owned by Italians, Portugueses, Spanish, Japoneses, other nationalities. In fact, the data is presented as: ’’Area and value of agricultural properties of the State, according to the nationality of the owner” (Recenceamento Agricola, 1934, p. 29). The concept o f ‘rural property’ was adopted as a proxy for the number of titles on land. The rural establishment was used by IBGE since 1920. According to Florido (2002), the 1920 agricultural census produced by IBGE defined ‘rural establishment’ as: “ For censuses purposes, rural establishment is defined as all extension of land subjected to the exclusive management o f one owner (proprieiario), renter (arrendatario), interested (interessado) or manager (administrador), who produce agricultural or cattle goods, alone or with the help of remunerated employees. The rural establishment is constituted by a single set (iote) of land (...). However, it may be represented by many sets (diversos lotes), separated from one another and located in the same district or in different districts, as long as it subjected to one single management” (Florido, 2002). While the ‘rural property’ is related to the ownership of the property, the ‘rural establishment’ is related to the type of management plus the type of ownership. However, there is a clear correspondence between the two concepts. The 1 'x The 1905 census presented the total area (not the cultivated area). This census did not present a breakdown by Rationality. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 277 1920 IBGE census presented the number and the area of rural estates (‘imoveis’) according to the owners’ nationality and the type of management (owners or managers or rental). For example, according to the 1920 census, Sao Paulo had 80,921 rural establishments. These rural establishments were divided in two categories: type of ownership (propriedade do imovel) and type of management (‘qualidade do responsavel pela exploracao’). In turn, according to the first category, there were 54,245 (68%) estates owned by Brazilians (‘imoveis the propriedade individual de brasileiro nato’), 22,065 (27%) owned by foreigners, 4,441 (5%) owned by more than one person and 42 (.05%) estates owned by the government.1 7 2 In terms of the type o f management, out of the 80,921 estates, there were 72,320 managed by the owner, 6,247 under the managers’ responsibility and 2,354 that were rented (arrendatario). According to Pino (2002), there is a clear correspondence between ‘rural property’ and ‘rural establishment’ in the 1920 census. We reproduce here the examples provided by Pino (2002). First, one ‘rural property’ is the rural area whose title on the land belongs to the same person, the owner, with one single producer. In this case, rural property equals rural establishment. Second, one rural property, with a single owner but with more than one producer (for example one producer is the owner and another was renting part of the property) but with centralized management. In this case, we also have ‘rural property’ equals ‘rural establishment’. Third, many ‘rural properties’ in different regions that belong to one single owner, 1 7 2 In the 1920 census the category “estates owned by companies” (‘imoveis the propriedade de pessoa juridical did not exist. It was included in the 1940 IBGE census. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 278 with one single producer (that can be the owner or the renter). Again, we have the correspondence between rural properties and rural establishments. In brief, we have equality between ‘rural property’ and ‘rural establishment’ when the owner has one (or more than one) property, rented out parts of Ms properties but preserved a unified management. Because we were interested in the breakdown by nationality, we excluded from the 1920 Sao Paulo data, the estates (imoveis) that had more than one owner as well as the areas that belonged to the government. In turn, according to the 1920 census data for Sao Paulo, there were 76,310 estates owned by a single owner (brazilian or foreigner). Out of the 76,310 estates, 95% were managed by the owner (not by managers or renters). In brief, while the distinction between ‘rural property’ and ‘rural establishment’ may be relevant for later census, we considered ‘rural establishment’, used in the 1920 census, as a good proxy for ‘rural property’. According to Florido (2002) the establishments, in turn, included in the 1920 censuses had to be registered in the General Bureau of Land (Registro Geral de Terra), that is, they required a title on the land. The author explained that the 1920 census excluded establishments whose annual production value was below $125 dollars (500 milreis). In the later census, according to Pino (2002) the correspondence between the two concepts became increasingly difficult. This is so because there was a division of the properties (the original owner renting out parts of the property). For example, when one farm is subdivided in 10 parts (9 were rented and managed by independent R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 279 producers) but the original owner preserves 1 part of the land, we have one ‘rural property’ but ten different ‘rural establishments’. Before the 1930s, according to Pino (2002), what usually happened was the owner to ‘rent’ parts of his properties to third parties in a sharecropping format. The owner still retained fill! control over the whole property, which was in turn, equal to the establishment. According to Pino (1999, 2002), the first Agricultural census of Sao Paulo, in 1905 used the sample unit known as ‘rural property’. Indeed, the same author explains that all the agricultural censuses between 1928 and 1939 used the same concept. The same concept was used by the IEA (Sao Paulo Agriculture Secretary) between 1943 and 1972. After 1972, the IEA adopted the concept o f ‘rural estate’ 173 (imovel rural). With the adjustments made in the 1920 census, described above, we think that the rural establishment is a good proxy for the rural property . 174 concept. As explained by Aristides Amaral (1932), the responsible for the agricultural census of Sao Paulo during 1930s, there were many problems to obtain the number and the area of rural properties because the researchers could not force the owners to declare the value or even the size of their properties. 1/3 Rural estate (imovel rural), according to Pino (1999 and 2002) is a concept created by INCRA during the 1960s defined as “ the set of contiguous properties from the same owner, that can be used for agricultural purposes. TWs concept has been used by the National Institute of Colonization and Land Reform (INCRA) to build the system of rural registration. By including in the same estate (imovel) all the contiguous properties belonging to one single owner, INCRA tries to avoid one latifundio to be sub-divided in small units to preclude expropriations for land reform purposes” (Pino, 2002). 1 7 4 According to conversation to Pino, there is a clear equivalence between ‘rural establishment’ and ‘rural property’ until the 1936 census. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 280 The data presented here for Sao Paulo, has limitations. However, we did not find any other set of information (like the notary publics, for example) that provided such a vast picture of the State between 1905 and 1930. For the 1905 census, we had to use Camargo (1954) mainly because the 1905 census was lost after 1977 (due to an administrative change in Sao Paulo). As explained by this author, the 1905 released only the breakdown by nationality of the owners. However, the census did not report the corresponded area that belonged to foreigners and Brazilians (only the total and cultivated area). This is why we did not present the 1905 area by nationality. For the 1920, 1923, 1932 and 1934 we had and used both: Camargo (1954) and the original sources. Finally, we could have chosen to follow another route and report that there was no ‘reliable’ information on the evolution of private property rights in the rural areas of Sao Paulo. We chose to report the information and to use it as a proxy for landownership, mainly because we did not find any measure that provided such a large time period and a detailed analysis at a municipio level. We argued that the system of private property rights in Sao Paulo evolved between 1895 and 1930 because we observed a decrease in the size of rural plots, an increasing share of foreigners among the coffee landowners and an increase in the number of rural properties. Clearly, the increase in the number of rural properties reflects two movements. First, it suggests that the fraction of land that is cleared increased, possibly because new municipios were being created between 1905 and 1934. Second, it also suggests that the number of titles on land, owned by immigrants and R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission. 281 brazilians, also increased. Mainly due to the ‘lack’ of reliable data (to find the gini. TFP and other measures), the works that dealt with the concentration of land do not even report the data on this period and assume that the failure of the 1850 land law and the subsequent inaction, from the states, explained the concentration of land in Brazil. In this work we found that such claim does not hold for the Sao Paulo experience until 1930. R eproduced with perm ission of the copyright owner. Further reproduction prohibited without perm ission.

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Creator Saddi, Vitoria C. (author)

Core Title The role of coffee in the creation of institutions in Brazil: 1830--1930

Degree Doctor of Philosophy

Degree Program Political Economy and Public Policy

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag economics, history,History, Latin American,Law,OAI-PMH Harvest

Language English

Contributor Digitized by ProQuest (provenance)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-258836

Unique identifier UC11334771

Identifier 3093809.pdf (filename),usctheses-c16-258836 (legacy record id)

Legacy Identifier 3093809.pdf

Dmrecord 258836

Document Type Dissertation

Rights Saddi, Vitoria C.

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA