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Part IV – The operation

The institutional nature of Banco de Lisboa had characteristics similar to those of other private banks created in Europe at the same time, with purposes articulated by two primary functions of service to the needs of the modern fiscal State: amortization and management of public debt securities and issuance of notes convertible banks, for the benefit of the efficiency of currency circulation.

Money Museum

The management

The bank's management was a matter for the competence of a Board composed of a President and eight directors, Portuguese or naturalized, holding at least 12 shares, elected annually by a General Meeting made up of the 100 main shareholders.

Management agreements

Among the first major decisions made by the Board of the Banco de Lisboa were deliberations on the face value of the banknotes to be issued, the opening of an office dedicated to discounting paper money in circulation (with the collaboration of a consortium of exchangers operating in Lisbon’s commercial milieu) and on the provision of a loan and its terms to the Government.

SEE HERE

Management agreements, 1822-1846
Historical Archive of Banco de Portugal

The shareholders

On the very first day of 1822, three businessmen from the capital were appointed as inspectors, with the task of supervising the subscription of shares to build up the Bank’s capital, a subscription which also began on that date. At first, the subscription of shares was scant and quite dispersed, with few large subscribers and the capital distributed among several small investors. Shareholders had to own at least twelve shares to participate in the General Meeting, where, among other management matters, the Chairman and the eight Members of the Board were appointed.

Terms of oath of the Presidents and Directors of the Bank

Terms of oath of the Presidents and Directors of the Bank, 1823-1846
Historical Archive of Banco de Portugal

Henrique Teixeira de Sampaio, Baron of Teixeira e 1st Count of Póvoa

The most prominent shareholder of the Banco de Lisboa was a dealer named Henrique Teixeira de Sampaio, Baron of Teixeira and 1st Count of Póvoa. Despite never having served as Member of the Board, he was the most influential figure behind the scenes. He served as Minister and Secretary of State for Finance between June 1823 and January 1825 and played an important role in ensuring that the circumstances of the Banco de Lisboa were not affected by the climate of political unrest in Portugal after the Vilafrancada political counter-revolution (May 1823) up to the granting of the Constitutional Charter (April 1826).

Henrique Teixeira de Sampaio
Images Archive of Banco de Portugal

Registration of proposals submitted to the General Meeting by the shareholders and their separate votes

Registration of proposals submitted to the General Meeting by the shareholders and their separate votes, 1822-1832
Historical Archive of Banco de Portugal

Joaquim da Costa Bandeira, 1st Count of Porto Covo da Bandeira

With the confidence of the Shareholders' Meeting, Joaquim da Costa Bandeira, at the time Baron of Porto Covo, was the first to hold the position of chairman of the Board of Banco de Lisboa.

Joaquim da Costa Bandeira
Images Archive of Banco de Portugal

Certificate of one share from Banco de Lisboa, from 1822, issued to António Francisco Machado

António Francisco Machado was a key player in the establishment of the Banco de Lisboa. A well-known investor in Lisbon’s commercial milieu, he had been awarded the tobacco contract with Jacinto da Costa and José Bandeira, and was manager and cashier of the Alenquer paper mill. As at 31 December 1821, he was one of the three inspectors appointed to the Banco de Lisboa. He was also the Bank’s first shareholder, having purchased the first 15 equity shares issued by the institution, totalling 7.5 million réis.

Money Museum

The employees

The Banco de Lisboa had the General Treasurer and the Bookkeeper, responsible for the Treasury and for the accounting and secretariat, below the Board of Directors. Below these there were treasurers, clerks, collectors, janitors and servants, in an initial total of 31 employees, who were added in 1824 plus 11.

Employee bail deeds

As a guarantee of the fullfillment of their duties, some employees with greater monetary responsibility, such as the treasurers, provided a surety upon joining the Bank. This forced them to be chosen not only for their talent, but for their possessions.

SEE HERE

Book 1 of "Employee bail deeds", 1822-1846
Historical Archive of Banco de Portugal

The day by day

The Bank's functions were divided into its 7 departments: manufacture and registration of notes, filing and registration of shareholders' securities, discounting of bills, purchase and sale of paper money, private deposits, treasury, and secretariat.

Banco de Lisboa scale

The operations of Banco de Lisboa included the handling of sizable amounts of gold and silver bullion, coins and pieces of jewellery. The valuation of these assets involved weighing them using scales with different sensitivities. For larger quantities, large double-pan balance scales such as this one were used, having been manufactured in England in 1822 and improved upon in 1835. The calculated weight was recorded in the Bank’s books according to the old system of weights based on the 8-ounce mark (approximately 229.5 grams).

Money Museum

Letter from Luis Pedro Lourenço sending the tables of the different touches and their corresponding values in gold and silver

Historical Archive of Banco de Portugal

Internal economy regulation of Banco de Lisboa

Internal economy regulation of Banco de Lisboa, 1822
Historical Archive of Banco de Portugal

Internal regulation from Banco de Lisboa

Banco de Portugal’s Library

Regulation for the Branch of Banco de Lisboa in Porto

Banco de Portugal’s Library

Pawn description

In this book, the values that were given to the bank as a pledge were registered. Values vary between bonds, stocks, pieces of jewellery, or perishable goods such as coffee bags, and we can consult the amounts in which they were valued.

SEE HERE

Pawn description, 1822-1824
Historical Archive of Banco de Portugal

Registration of notes bills and orders

The keeping of records of banknotes and orders issued by the Banco de Lisboa was in accordance with the provisions of its Economic Regulation. In addition to the more detailed terms of issue and amortisation, the record books made it possible to quickly check all plates (or types) put into circulation, issue dates and volumes, signatures and serial numbers. All this information was supplemented with the attachment with glue of authentic copies.

SEE HERE

Registration of notes bills and orders, 1822-1843
Historical Archive of Banco de Portugal

“Web” for the production of paper for Banco de Lisboa banknotes

To deter and hinder counterfeiting, the paper used in banknotes and orders issued by the Banco de Lisboa was thin and contained a complex watermark created by employing metal webs like the one shown here. The paper produced by this web was used in the Bank’s orders from 1844 onwards. It would then be used by the Banco de Portugal to issue banknotes still on behalf of its predecessor until 1848 and in its own issues until 1875.

Money Museum

Royal impression torcle, allegedly used to print the first Banco de Lisboa banknotes

With a view to starting issuing banknotes, the Banco de Lisboa sought to acquire its own printing works. To that end, it commissioned the manufacturer Jacob Haas to build a wooden torcle for the printing of the banknotes. A delay in delivery prompted the Board to ask for the loan of the Official Printing Office’s torcle that had been in Francesco Bartolozzi’s workshop. The Bank’s first banknotes were printed between the end of June and 13 August 1822 using this press, and were worth 19,200, 48,000 and 96,000 réis, respectively.

The Portuguese Mint and Official Printing Office (INCM)

Incoming correspondence regarding methods to prevent counterfeiting of banknotes

Incoming correspondence regarding methods to prevent counterfeiting of banknotes, 1822-1841
The Historical Archive of Banco de Portugal
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BL 35 150 1 Suplemento Burlesco 1197 V
Part V

The crisis

At the Banco de Lisboa’s General Meeting sessions held in 1826 and 1827, the main shareholders made clear their concerns about the government’s pressure to issue a new loan and to make advance payments through the Bank to various branches of public administration. The liquidity problems caused by the demand for metal currency to be exchanged for an increasing amount of discounted paper money were also evident, while it was found that the latter’s process of extinction and progressive substitution by banknotes was far from achieving the desired outcome.