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Encilhamento, a horse-racing term that refers to the stock-market boom in Brazil, especially in Rio de Janeiro, between 1889 and 1893. The abolition of slavery in Brazil in 1888 and the desire to attract immigrants and foreign investment demanded a greatly enhanced national banking system. To placate ex-slaveowners, ease the transition to wage labor, and take advantage of unusually abundant and interested European capital markets, the last imperial ministry began in July 1889 to lend funds and liberalize banking and currency issue laws. This ignited an explosion of national and foreign investments in banks, railways, and many other activities. The Rio stock market saw more activity in the second half of 1889 than it had in its previous history. Although much of the dealing was speculative and even fraudulent, as was depicted in the Viscount of Taunay's novel O Encilhamento, there were authentic efforts to create enormous corporations.

The demise of the empire on 15 November 1889 and the rise of the republic did not stop the dealing. The republican minister of finance, Rui Barbosa, relaxed corporation laws and awarded generous government concessions to buy friends for the new regime and promote a laissez-faire state. Although European interest in Brazil waned in 1890, Brazilian investors continued to speculate. Mammoth investment banks created vast corporations.

The investors in the Encilhamento were behind President Deodoro da Fonseca's closing of Congress in November 1891. Opponents of the investors backed Marshal Floriano Peixoto's overthrow of Fonseca twenty days later. Peixoto began attacking some of the key bankers, whom he considered enemies of the republic. The stock boom fizzled in early 1893 and ended with the defeat in 1893–1894 of the naval revolt the financiers had supported.

See alsoBrazil: Since 1889 .


Barbara Levy, "O Encilhamento," in Economia brasileira: Uma visão histórica, edited by Paulo Neuhaus (1980).

Luiz Antonio Tannuri, O Encilhamento (1981).

Gustavo Henrique Barroso Franco, Reforma monetária e instabilidade durante a transiçao republicana (1983).

Steven Topik, "Brasil's Bourgeois Revolution," in The Americas 48 (October 1991): 245-271.

Additional Bibliography

Schulz, John. A crise financeira da abolição, 1875–1901. São Paulo: Edusp: Instituto Fernand Braudel, 1996.

Triner, Gail D. Banking and Economic Development: Brazil, 1889–1930. New York: Palgrave, 2000.

                                   Steven Topik