The financial crisis, 1890–1892

In the early 1890s, Portugal’s public finances were in distress due to the accumulation of high levels of debt principally raised in the Paris and London markets and which had to be redeemed in gold or foreign exchange, which was obtained either by revenues from exports, remittances of Portuguese emigrants in Brazil, or capital imports. The domestic financial crisis was a consequence of the policies followed by the finance minister Mariano de Carvalho and the government of the Partido Progressista that aimed at revolutionising the way public finances were conducted in the country. In Parliament, the financier Augusto Fuschini proposed that interest on foreign debt be left untouched and that on domestic debt pay no more than 10% tax. The financial impact of Ferreira’s measures on the Portuguese public debt paid abroad was not as great as the wave of political reaction suggested.