Lisbon

For purposes of commerce, colonization, or warfare, Lisbon provides the best deepwater harbor in southwest Europe. Prevailing Atlantic wind and current patterns give Lisbon a geographic advantage for shipping bound from northern Europe to the Mediterranean, West Africa, Asia (by either cape route), and the Americas. Voyages of discovery by Bartolomeu Dias (Cape of Good Hope), Vasco da Gama (India), and Pedro Álvares Cabral (Brazil) all departed from Lisbon; the port was Columbus's first European landfall after his pathfinding Caribbean voyage, and the Spanish Armada fitted out there in 1588.

From 1415 to 1975, Lisbon was the imperial governing center and principal trade hub of a worldwide colonial and commercial network. The Portuguese economy of the sixteenth and seventeenth centuries was based on spices and luxury goods from Asia; sugar and tobacco from Madeira, the Azores, and later Brazil; and salt from southern Portugal. In the eighteenth and nineteenth centuries, the imperial economy shifted decisively to the Atlantic: The mainstays were Brazilian gold and leather, Angolan slaves, and Portuguese wine. Foreign investment supported early trade with Asia; German Fuggers, Venetian merchants, and the Medici all provided finance to the Portuguese crown in the sixteenth century.

Because few export commodities originated in the metropolis, Portuguese fiscal policy depended on the re-export of colonial goods through Lisbon. Portugal maintained a mercantilist economy from the fifteenth to the eighteenth century, deriving most state income (approximately 65%) through seaborne trade. Primary revenue sources included customs duties and consular charges, taxes on tobacco production, and the crown's 20 percent share of Brazilian gold imports. During the eighteenth century, Brazilian bullion imports flowing through Lisbon stimulated economic activity across Europe. Until the devastating earthquake in 1755, royal officials (desembargadores) conducted customs (alfândega) and accounting procedures at the Casa da Índia, adjacent to the Lisbon waterfront palace in Lisbon. The crown participated actively in maritime trade through lucrative royal monopolies.

Britain was Portugal's most important trading partner and oldest ally; English commerce annually accounted for more than half of Lisbon's total trade volume. Britain's North American colonies absorbed a large share of Portuguese exchange. Several export industries—in particular salt, olive oil, fruits, and Madeira wine—depended on markets in North America. Lisbon's other principle trading partners included the Flemish, Dutch, French, Italians, Danes, and Swedes.

A treaty concluded with Oliver Cromwell in 1654 allowed the establishment of a resident English merchant community in Lisbon. The Methuen Treaty (1703) cemented conditions for Anglo-Portuguese commercial ties that continued into the nineteenth century. In exchange for the duty-free entrance of English woolens into Portugal, the Portuguese received a favored status on Port wine, taxed at one-third less than French wines sent to Britain.

Portugal's economic vitality depended on colonies. Maintaining the integrity of the Portuguese colonial system, and even national independence, required appeasement and cooperation with all threatening neighbors. Portugal, a second-tier European power lacking population and adequate defenses and dependent on food imports, often had to maintain neutrality between warring European power blocs, to keep trade links open with both sides.

British pressure compelled the Portuguese to close their ports to shipping from the rebellious United States (1776–1783); trade exigencies then dictated that Portugal become the first nation to recognize U.S. sovereignty following hostilities. During World War II, when British, American, and German agents operated there, neutral Lisbon was a scene of Allied/Axis intrigue. Lisbon today remains an important commercial port, a center of ship repair, and a base of NATO maritime operations.

SEE ALSO Agriculture; Albuquerque, Afonso de; Angola; Bahia; Cargoes, Freight; Cargoes, Passenger; Chambers of Commerce; Containerization; Empire, Portuguese; Free Ports; Gama, Vasco da; Harbors;Pombal, MarquÈs de;Port Cities;Portugal;Spices and the Spice Trade.

BIBLIOGRAPHY

Fisher, Harold Edward Stephen. The Portugal Trade: A Study of Anglo-Portuguese Commerce, 1700–1770. London: Methuen, 1971.

Hanson, Carl A. Economy and Society in Baroque Portugal, 1668–1703. Minneapolis: University of Minnesota Press, 1981.

Russell-Wood, A. J. R. A World on the Move: The Portuguese in Africa, Asia and America, 1415–1808. London: Carcenet Press, 1992.

Walker, Timothy D. "Lisbon as a Strategic Haven in the Atlantic World." In The Atlantic World: Essays on Slavery, Migration and Imagination, eds. Wim Klooster and Alfred Padula. Upper Saddle River, NJ: Pearson Prentice Hall, 2004.

Timothy D. Walker